NY-PVH Private Housing Finance Law NY

Contents

ARTICLE 1 Short Title; Definitions

§ 1 — Short title

Short title. This chapter shall be known and may be cited and

referred to as the "private housing finance law."

§ 2 — Definitions

Definitions. The following terms, whenever used or referred to in

this chapter, shall have the following meaning, unless a different

meaning clearly appears from the context, or unless specifically defined

in any of the articles of this chapter:

1. "Area". A section of a municipality which is substandard or

insanitary. The term "substandard or insanitary area" shall mean and be

interchangeable with a slum, blighted, deteriorated or deteriorating

area, whether residential, non-residential, commercial, industrial, or

vacant, or any combination thereof and may include land and buildings or

improvements not in themselves insanitary or substandard, the inclusion

of which is necessary to effectuate a plan.

2. "Assessed valuation." The value of any parcel of real property with

respect to any local tax thereon, including therein buildings and

improvements as well as land, as assessed by the respective official,

bureau, board, commission or agency charged with assessing the same for

such local tax.

3. "Authority." A public corporation as defined in subdivision two of

section three of the public housing law.

4. "Banking institution." Any corporation, association or organization

organized under the banking laws of New York state or the United States

which is authorized to transact business in this state.

5. "City." A city in the state.

6. "Commissioner." The commissioner of housing of the state of New

York.

7. "Comptroller." The comptroller of the state of New York.

8. "Condemnation." The acquisition of real property in the manner

provided by any general, special or local law or city charter for the

acquisition of real property by the municipality in which such property

is to be taken.

8-a. "Federal government." The government of the United States of

America or any agency or instrumentality thereof.

9. "Foundation." Any organization, association or corporation

organized for charitable purposes which shall have received exemption

from federal taxation by virtue of its eleemosynary, religious or

educational functions.

9-a. "Home owners purchase note." A promissory note accepted by a

mutual company, mutual housing company, mutual redevelopment company, or

housing development fund company which is organized pursuant to the

business corporation law and article eleven of this chapter, as

consideration for the issuance of shares entitling a person or family to

occupancy of an apartment in a project of such mutual company, mutual

housing company, mutual redevelopment company, or housing development

fund company, as the case may be, payable over or within a period of ten

years.

10. "Insurance company." Any insurance company authorized to transact

business in this state.

11. "Labor union." Any organization organized under the laws of the

state of New York and which exists and is constituted for the purpose,

in whole or in part, of collective bargaining, or of dealing with

employers concerning grievances, terms or conditions of employment or of

other mutual aid or protection for its members.

12. "Local legislative body". In a city, the board of aldermen, common

council, commission, or other board or body now or hereafter vested with

jurisdiction to enact ordinances or local laws, except that if there be

in a city of one million population or more, a board of estimate, the

term shall mean only such board of estimate; in a town, the town board;

in a village, the board of trustees; in a county, the board of

supervisors.

13. "Mortgage." A mortgage, trust indenture, deed of trust, building

and loan contract or other instrument creating a lien on real property,

and the indebtedness secured by each of them.

14. "Multiple dwelling." An existing building, accommodating three or

more families living independently of each other.

14-a. "Mutual company," "mutual housing company" or "mutual

redevelopment company". A limited profit or limited dividend housing

company incorporated pursuant to the provisions of this chapter or a

redevelopment company incorporated pursuant to the provisions of this

chapter, and operated exclusively for the benefit of the persons or

families who are entitled to occupancy in a project of such company,

housing company or redevelopment company, as the case may be, by reason

of ownership of shares therein.

15. "Supervising agency." The comptroller in a municipality having a

comptroller; in a municipality having no comptroller, the chief fiscal

officer of such municipality; except that in the city of New York it

shall be the department of housing preservation and development.

16. "Municipal corporation," and "municipality". A city, town or

village, or a county having a county department of assessment with the

power to assess real property; the term "municipal" shall be deemed to

relate to a city, town or village, or to a county having a county

department of assessment with the power to assess real property.

17. "Municipally-aided project." A limited profit housing company

project, other than a state urban development corporation project, which

is aided by a municipal mortgage loan, a loan by the New York city

housing development corporation or tax exemption or both and is not

aided by any state mortgage loan or any mortgage loan made by the New

York state housing finance agency or any mortgage loan made by the

Battery Park city authority or any mortgage loan insured by the federal

government made for the purpose of refinancing a mortgage loan other

than a municipal mortgage loan or a mortgage loan made by the New York

city housing development corporation.

18. "Neighborhood unit." A primarily residential district having the

facilities necessary for well-rounded family living, such as schools,

parks, playgrounds, parking areas and local shopping districts.

19. "Persons of low income" and "families of low income." Persons or

families who are in the low income groups and who cannot afford to pay

enough to cause private enterprise in their municipality to build a

sufficient supply of adequate, safe and sanitary dwellings.

20. "Plan." A plan or undertaking for the clearance, replanning and

reconstruction or rehabilitation of a substandard and insanitary area or

areas and for recreational and other facilities incidental or

appurtenant thereto to effectuate the purposes of article eighteen of

the constitution.

21. "Planning commission." Any agency of a municipality authorized to

prepare, adopt or amend the map of the municipality or empowered to

prepare, adopt and from time to time modify a comprehensive or master

plan of the municipality, if there be one, or if there be none, the

local legislative body of the municipality.

22. "Project." A specific work or improvement to effectuate all or any

part of a plan. The term shall include the lands, buildings and

improvements acquired, owned, constructed, managed or operated

hereunder, to provide dwelling accommodations for persons of low income,

and such stores, offices and other non-housing facilities as well as

social, recreational or communal facilities, as may be deemed by the

authority or municipality to be incidental or appurtenant to a project.

Subject to the provisions of article eighteen of the constitution with

respect to state projects, such dwelling accommodations may be provided

in any section of the municipality, whether or not such section has

insanitary or substandard housing conditions.

22-a. "State urban development corporation project". A project

acquired, owned, constructed, managed or operated by a company organized

pursuant to articles two, four or eleven of this chapter which is a

subsidiary of the New York state urban development corporation, as the

term "subsidiary" is defined in the New York state urban development

corporation act.

22-b. "Battery Park city project." A project acquired, owned,

constructed, managed or operated by a company organized pursuant to

article two, article four or article eleven of this chapter and located

within the Battery Park project area, as defined in the battery park

city authority act.

23. "Project cost." The cost of any or all undertakings necessary for

planning, financing (including payment of carrying charges), land

acquisition, demolition, construction, equipment, and site development

of new buildings, reconstruction, repair or remodeling of existing

buildings, but not beyond the point of physical completion; and the cost

of tenant placement service in connection with a project.

24. "Real property" or "property." Lands and improvements and any

fixtures, equipment and article of personal property affixed to or used

in connection therewith, lands under water, waterfront property, the

water of any lake, pond or stream, and any and all easements, franchises

and hereditaments, corporeal or incorporeal, and every estate, interest

and right therein, legal and equitable, in lands or water, and right,

interest, privilege, easement and franchise relating to the same,

including terms for years and liens by way of judgment, mortgage or

otherwise.

25. "State." The state of New York.

26. "State-aided project". Any project other than a municipally-aided

limited profit housing company project, a redevelopment company project

or a redevelopment corporation project.

27. "Total carrying charges". All charges paid to the housing company

by a person or family living in a project under a lease for ninety-nine

years renewal, or in perpetuity, or by reason of ownership of stock in

such company. The word "rental" shall mean and be interchangeable with

"total carrying charges" when used in connection with a mutual company.

28. "Veterans' organization." Any organization of persons who have

served in the armed forces of the United States during time of war which

has been duly chartered as a veterans' organization under the laws of

the United States or of the state of New York.

29. "Annual income" or "income". The total income as reported in the

New York state income tax return, less such personal exemptions and

deductions for medical expenses as are actually taken by the taxpayer.

Provided, however, that federal old age, survivors, and disability

insurance benefits shall not be deemed income in articles two, four and

eleven of this chapter. This definition shall be employed in articles

two, four, eight and eleven of this chapter in the computation of

"probable aggregate annual income" as therein defined.

30. "Climate resiliency improvements." Improvements for the purpose of

protecting land or any structures thereon from damage resulting from or

which may result from changes in climate, including, but not limited to,

extreme weather events, abnormal temperatures, and sea level rise, or of

reducing the impact of the operation of such structures on climate

change, including, but not limited to, improvements that reduce energy

consumption or promote the efficient use of natural resources.

31. "Private lender." One or more banking organizations, foundations,

labor unions, credit unions, employers' associations, veterans'

organizations, colleges, universities, educational institutions, child

care institutions, hospitals, medical research institutes, insurance

companies, trustees or fiduciaries, trustees of pensions and retirement

funds and systems, corporations, partnerships, individuals or other

entities or any combination of the foregoing, and shall include any

public benefit corporation and the United States of America and any of

its agencies and departments. As used in this definition, the terms

"trustees" and "fiduciaries" shall include any fiduciary or fiduciaries

holding funds for investment and the term "banking organizations" shall

have the same meaning as in subdivision eleven of section two of the

banking law.

ARTICLE 2 Limited-profit Housing Companies

§ 10 — Short title

Short title. This article shall be known and may be cited and

referred to as the "limited-profit housing companies law."

§ 11 — Policy and purposes of article

Policy and purposes of article. It is hereby declared that there

exists in municipalities in this state a seriously inadequate supply of

safe and sanitary dwelling or non-housekeeping accommodations for

families and persons of low income, including accommodations for

handicapped persons of low income and aged care accommodations for aged

persons of low income; that such conditions are due, in large measure,

to over-crowding and concentration of the population, improper planning,

excessive land coverage, lack of proper light, air and space, improper

sanitary facilities and inadequate protection from fire hazards; that

such conditions constitute an emergency and a grave menace to the

health, safety, morals, welfare and comfort of citizens of this state,

necessitating speedy relief which cannot readily be provided by the

ordinary unaided operation of private enterprise and require that

provision be made by which private free enterprise may be encouraged to

invest in companies regulated by law as to rents, profits, dividends and

disposition of their property or franchises and engaged in providing

such housing facilities and other facilities incidental or appurtenant

thereto for families or persons of low income; that it is necessary that

provision be made for participation by the state, its municipalities and

the New York state housing finance agency in the financing of such

housing, for the acquisition by such companies of real property required

for such purposes and for public assistance to such companies by the

granting of tax exemptions; that the cooperation of the state, its

subdivisions and the New York state housing finance agency is necessary

to accomplish such purposes; that the provision of such adequate, safe

and sanitary housing accommodations by such companies jointly or

severally are public uses and purposes for which public money may be

loaned and private property may be acquired by and for such companies

and tax exemptions granted; that such conditions require the creation of

the companies hereinafter prescribed for the purpose of attaining the

ends herein recited; and the necessity in the public interest for the

provisions hereinafter enacted is hereby declared as a matter of

legislative determination.

§ 11-a — Additional policy and purposes of article

Additional policy and purposes of article. 1. It is hereby

declared that the elimination of conditions causing a deterioration of

the quality of urban life in municipalities of the State and the

revitalization and improvement of the quality of urban life in such

municipalities through comprehensive programs and projects constituting

a total attack upon such conditions are the most critical problems

facing the municipalities, the state and the federal government, and are

vital to the health, well-being, safety and prosperity of the

inhabitants of the municipalities and the people of the state. Neither

the municipalities nor the state have adequate resources to undertake,

develop and operate the comprehensive programs and projects necessary

for the accomplishment of such purposes. The ordinary operations of

private enterprise cannot rectify such conditions or accomplish such

purposes. The elimination of such conditions and accomplishment of such

purposes require the participation and cooperation of the

municipalities, the State, the Federal government, private enterprise,

institutions of higher learning, community and civic groups, fraternal

and labor organizations, foundations, and all other responsible

components of the community.

2. Among the conditions causing such deterioration are: the residence

of large numbers of families, adults and children in slum ghettos;

insanitary and inadequate housing or other physical environment; a

severe shortage of decent healthful housing accommodations to meet the

needs of large numbers of families, adults and children; economic,

educational or community imbalance resulting from excessive migration of

economic or other groups to or from communities; depletion of job or

business opportunities because of migration of business and industry

from communities; and the existence of physical, social, and economic

blight and crime. Such conditions create and perpetuate slum ghettos,

blight and crime, cause a progressive deterioration of the quality of

urban life for all persons in the municipalities and the State, render

or tend to render the municipalities undesirable places in which to

live, work and raise families, impair the sound economic, cultural and

social growth of municipalities and communities thereof, break down the

ability of municipalities or communities thereof to grow, expand,

develop or continue as viable municipalities or communities, and

threaten the life, health, well-being, safety and prosperity of all

persons in municipalities and the people of the State.

2-a. It is hereby found that improvement of the physical environment

and revitalization of the quality of urban life in such municipalities

would be promoted by cooperative action by tenants who are persons or

families of low income to acquire ownership of their dwellings and to

operate them on a nonprofit basis; that such cooperative undertakings,

with their consequent pride and responsibility of ownership, would help

to stem the abandonment of deteriorating but structually sound

buildings, which contributes to a substantial loss of much needed

housing stock, and would lead to the stabilization and renewal of

deteriorating neighborhoods. It is found necessary, in order to assure

the feasibility of such cooperative undertakings, to make available to

such tenants long-term financing on a favorable basis and tax exemption

to enable them to purchase and maintain their dwellings at a reasonable

cost.

3. The rehabilitation or redevelopment of slum ghettos and other areas

into sound healthy balanced viable communities, the enhancement of the

physical environment, health, and social well-being of the inhabitants

and the expansion of their social and economic opportunity require among

other measures the attraction to the neighborhoods of varying economic

classes in addition to persons of low income and the availability

therein of a wide choice of housing from the standpoint of design and

amenities.

4. It is hereby further found that there are certain parts of

municipalities where conditions of blight are so extensive in area that,

notwithstanding a continued shortage of safe and sanitary dwelling

accommodations in the municipality for low and middle income families,

it is not economic for private enterprise to build limited profit

housing in such areas since it cannot supply proper housing at prices

within the economic reach of low-income families in such blighted areas

or attract tenants or buyers from other areas by offering rents and

prices which are competitive with rents and prices of housing in areas

of the municipality which are not blighted. It is found that there are

other locations in such municipalities where housing development is

desirable for sound community growth, but, similarly, where private

enterprise cannot build limited profit housing which is within the

economic reach of persons in the area who require such housing.

5. It is the purpose of this article to enable municipalities to

undertake projects directly or in combination with the Federal

government, private enterprise and any of the other responsible

components of the community, to accomplish the public purposes herein

described through the most effective and economical concentration and

coordination of Federal, State, local and private resources and efforts.

6. It is hereby further found and determined that the accomplishment

of the purposes herein described is a matter of public concern, a

governmental purpose, a city, town, and village purpose, and a public

purpose and a public use for the accomplishment of which (a) the money

and property of a city, town or village, may be given, loaned or

expended, (b) indebtedness may be contracted by a city, town or village,

and (c) eminent domain exercised by a city, town or village, as

hereinafter provided.

§ 12 — Definitions

Definitions. As used in this article, the following terms shall

mean and include:

1. "Areas." A section of a municipality in which there is to be

located a project approved by the municipality as provided in paragraph

(a) of subdivision one and in subdivision five of section twenty-six of

article two of this chapter.

2. "Company". A limited-profit housing company duly incorporated

pursuant to the provisions of this article, or a company incorporated

pursuant to the not-for-profit corporation law and this article for the

purpose of providing housing and auxiliary facilities for staff members,

employees or students of a college, university, hospital or child care

institution and their immediate families or for aged or handicapped

persons of low income, pursuant to this article, or a municipally-aided

non-profit company as hereinafter defined, or a low income non-profit

housing company as hereinafter defined.

2-a. "Home owners purchase note." A promissory note accepted by a

mutual company as consideration for the issuance of stock entitling a

person or family to occupancy of an apartment in a project, payable over

or within a period of ten years.

2-b. "Mutual company." A company whose dwelling facilities, to the

extent of at least eighty per centum, are occupied by persons or

families who are entitled to such occupancy by reason of ownership of

shares in such company; provided however that a company that was not a

mutual company prior to July first, nineteen hundred ninety-five may

become a mutual company if its dwelling facilities, to the extent of at

least fifty per centum, are occupied by persons or families who are

entitled to such occupancy by reason of ownership of shares in such

company. The commissioner or supervising agency shall provide procedures

for such conversion of a company to a mutual company on or after July

first, nineteen hundred ninety-five; such procedures shall require the

submission of a plan for attaining eighty per centum owner occupancy.

2-c. "Urban Rental Company." A company whose project is located in or

adjacent to a municipality and whose housing accommodations are occupied

by persons or families who do not own the shares in such company.

3. "Occupancy date." The date defined in the contract between a

company and a municipality or the state, as the case may be, as the date

upon which the project is to be deemed ready for occupancy, or if such

term is not defined in such contract, the date of issuance of the

temporary certificate of occupancy.

4. "Plan." A plan or undertaking of an area or areas for providing low

rent housing for persons of low income, and for other facilities

incidental and appurtenant thereto.

5. "Project." A specific work or improvement, including lands,

buildings and improvements acquired, owned, constructed, rehabilitated,

improved, managed or operated by a company providing dwelling

accommodations, non-housekeeping accommodations, aged care

accommodations or accommodations for handicapped persons pursuant to

this article, or undertaken, planned, developed, constructed or owned

pursuant to section thirty-six-a of this article, and such business,

commercial, cultural, recreational, communal, dining, medical and

nursing treatment, day care or residential child care facilities or any

combination thereof, or other facilities as may be deemed by the

commissioner with respect to a project aided by a state loan or New York

state housing finance agency loan or by the supervising agency with

respect to a municipally-aided project or a project undertaken, planned,

developed, constructed or owned pursuant to section thirty-six-a of this

article, to be incidental and appurtenant thereto. In the case of a

state loan or New York state housing finance agency loan, a project

shall effectuate all or part of a plan, provided, however, that such

dwelling accommodations, non-housekeeping accommodations, aged care

accommodations or accommodations for handicapped persons may be provided

in any section of the municipality, whether or not such section has

insanitary or substandard housing conditions.

5-a. "State urban development corporation project". A project

acquired, owned, constructed, managed or operated by a limited-profit

housing company which is a subsidiary of the New York state urban

development corporation, as the term "subsidiary" is defined in the New

York state urban development corporation act.

5-b. "Battery Park city project." A project acquired, owned,

constructed, managed or operated by a company organized pursuant to this

article and located within the Battery Park project area, as defined in

the Battery Park city authority act.

6. "Project cost". The sum total of all costs incurred by a company

and, as approved by the commissioner in the case of a state-aided

project or a project aided by the New York state housing finance agency

or by the supervising agency in the case of a municipally-aided project

as reasonable and necessary for carrying out all works and undertakings

for the development of a project. These shall include but are not

necessarily limited to the carrying charges during construction and

before physical completion or rehabilitation, working capital not

exceeding three per cent of the estimated total cost or three per cent

of the actual total final cost, whichever is larger, the cost of all

necessary studies, surveys, plans and specifications, architectural,

engineering, or other special services, the cost of acquisition of land

and any buildings thereon, site preparation and development,

construction, reconstruction and equipment; the reasonable cost of

financing incurred by the investor in the course of development of the

project, up to and including the occupancy date; the fees imposed by the

commissioner or by the supervising agency or by both; other fees charged

in the course of the development of the project up to and including the

occupancy date, pursuant to the provisions of this article; the

necessary expenses in connection with the initial occupancy of the

project and where applicable, the cost of such training services as will

assist the residents of the project to acquire ownership and to operate

the project in an efficient and harmonious manner; and the cost of such

other items, including tenant relocation, as the commissioner, in the

case of a state-aided project or a project aided by the New York state

housing finance agency or the supervising agency, in the case of a

municipally-aided project shall determine to be reasonable and necessary

for the development of the project, less any and all net rents and other

net revenues received from the operation of the real or personal

property on the project site, or any part thereof, by the company on or

after the date on which the contract between the company and the state

or the New York state housing finance agency or municipality was entered

into and prior to the occupancy date. In the case of any project

purchased or leased by a company from a municipality pursuant to the

provisions of section thirty-six-a of this article, project cost shall

include the value of the lease or the purchase price paid or to be paid

by such company to such municipality.

7. "Local and municipal taxes". Taxes levied by a county, city,

village, town, school and special district but shall not include

assessments for local improvements.

8. "Child Care Institution"--A private, non-profit, resident agency,

association, corporation, institution or other organization, which is

incorporated or organized under the laws of this state for the care and

treatment of children, which actually has its place of business or plant

in this state and which submits and consents to the approval,

visitation, inspection and supervision of the Department of Social

Welfare, or a similar administrative department of the State of New York

as to any and all acts in relation to the welfare of children performed

or to be performed thereby.

9. "Housing". As used in this article the term includes:

(a) "Dwellings". "Dwelling accommodations". A room or rooms, with or

without cooking facilities, arranged for occupancy as a self-contained

unit.

(b) "Non-housekeeping accommodations". A room or rooms, without

cooking facilities, and with or without board designed for the occupancy

of staff members, employees or students of a college, university or

hospital.

(c) "Aged care accommodations". Non-housekeeping accommodations for

aged persons with board and aged care service as may be provided as an

incident to occupancy, provided however, that no such service shall be

of such a nature, kind or quality as to require licensing by the state

department of health under article twenty-eight of the public health

law.

(d) "Accommodations for handicapped persons." Dwelling accommodations

designed for the occupancy of handicapped persons or non-housekeeping

accommodations designed for the occupancy of handicapped persons with

board and such service as may be provided as an incident to occupancy,

provided however, that no such service shall be of such a nature, kind

or quality as to make the facility subject to the jurisdiction of any

other agency of the state.

10. "Persons of low income" and "families of low income". Persons or

families who are in the low income groups and who cannot afford to pay

enough to cause private enterprise in their municipality to build a

sufficient supply of adequate, safe and sanitary dwellings,

non-housekeeping accommodations or aged care accommodations.

11. "Preliminary Costs". Project costs approved by the supervising

agency as appropriate expenditures which may be incurred prior to

commitment and initial advance of the proceeds of a mortgage loan under

this article, including but not limited to: (a) payments for options to

purchase properties on the proposed housing project site, deposits on

contracts of purchase, or with prior approval of the supervising agency,

payments for the purchase of such properties; (b) legal and

organizational expenses, including payment of attorneys' fees, project

manager and clerical staff salaries, office rent and other incidental

expenses; (c) payment of fees for preliminary feasibility studies and

advances for planning, engineering and architectural work; (d) expenses

for tenant surveys and market analyses; (e) necessary application and

other fees; and (f) such other expenses incurred by the limited-profit

housing company as the supervising agency may deem appropriate to

effectuate the purposes of this article.

12. "Municipally-aided non-profit company." A non-profit housing

company duly incorporated pursuant to the not-for-profit corporation law

and this article, which is aided by a municipal mortgage loan, a loan by

the New York city housing development corporation or tax exemption or

both and is not aided by any state mortgage loan or any mortgage loan by

the New York state housing finance agency or a mortgage loan insured by

the federal government made for the purpose of refinancing a mortgage

loan other than a municipal mortgage loan or a mortgage loan made by the

New York city housing development corporation.

13. "Municipally-aided mutual company." A mutual company which is

aided by a municipal mortgage loan, a loan by the New York city housing

development corporation or tax exemption or both and is not aided by any

state mortgage loan or any mortgage loan by the New York state housing

finance agency or a mortgage loan insured by the federal government made

for the purpose of refinancing a mortgage loan other than a municipal

mortgage loan or a mortgage loan made by the New York city housing

development corporation.

14. "Low income non-profit housing company." A non-profit housing

company duly incorporated pursuant to the not-for-profit corporation law

and this article, whose principal purpose is to provide housing for

persons of low income and families of low income and which is aided by a

state mortgage loan or mortgage loan by the New York state housing

finance agency or a municipal mortgage loan or municipal tax exemption,

or both, or a mortgage loan insured by the federal government.

15. "Residual indebtedness." Where a mortgage loan is refinanced

pursuant to section twenty-three-a or subdivision twenty-two-a of

section six hundred fifty-four of this chapter, residual indebtedness

shall be the indebtedness of a company due on the original mortgage

loan, including all unpaid principal and all interest accrued thereon,

less an amount equal to the principal amount, when made, of the mortgage

insured by the federal government in connection with the refinancing.

Such indebtedness shall be secured by a mortgage which may be

subordinate to the lien of any mortgage insured by the federal

government and may contain such terms and conditions not inconsistent

with this article as may be approved by the supervising agency and as

the supervising agency may deem necessary or desirable to secure the

repayment of such residual indebtedness. Residual indebtedness shall not

be restricted by the provisions of this article relating to project

cost.

16. "Residual receipts obligations". Where a mortgage loan is

refinanced pursuant to section twenty-three-a or subdivision

twenty-two-a of section six hundred fifty-four of this chapter, residual

receipts obligations shall mean the amount of any additional loan to a

company, and any amounts paid other than by the company, to establish

escrow accounts or reserves or to satisfy minimum property standards or

to install life safety devices for the issuance of mortgage insurance by

the federal government in connection with the refinancing. With the

approval of the supervising agency and the consent of the company,

residual receipts obligations may be evidenced by non-interest bearing

residual receipts notes. Residual receipts obligations shall be payable

only after the payment in full of all residual indebtedness. Residual

receipts obligations shall not be restricted by the provisions of this

article relating to project cost and shall not include any amounts

deposited under an agreement with the federal government for the sharing

of claims paid by the federal government on account of insurance of

mortgages.

§ 13 — Limited-profit housing companies; how created

Limited-profit housing companies; how created. A company may be

created by three or more persons, approved by the commissioner, by

making, subscribing, acknowledging and filing with the secretary of

state a certificate which shall be entitled and endorsed "Certificate of

Incorporation of (name of company) pursuant to the Limited-Profit

Housing Companies Law"; provided that if the company is to be organized

to undertake a municipally-aided project the commissioner shall not

approve such persons unless they shall have been first approved by the

supervising agency; provided further that no company shall be created to

provide aged care accommodations or accommodations for handicapped

persons under this article, except under this article and the

not-for-profit corporation law. The certificate shall state:

1. The name of the proposed company.

2. The purposes for which it is to be formed which shall include among

other things a provision that the company is to plan, acquire,

construct, own, maintain, and operate projects pursuant to the terms and

provisions of this article.

3. Except in the case of a not-for-profit corporation, the amount of

the capital shares, and if any be preferred shares, the preference

thereof.

4. Except in the case of a not-for-profit corporation, the number of

shares of which capital shall consist, all of which shall have a par

value.

5. The municipality, as well as the county within this state, in which

its principal business office is to be located, and the address to which

the secretary of state shall mail a copy of process in any action or

proceeding against the corporation which may be served upon him.

6. Its duration, which shall be: (a) not less than the period for

which the loans contracted for under this article and the interest

thereon remain unpaid in whole or in part; and (b) not less than the

period for which tax exemption is granted pursuant to section

thirty-three of this article; and (c) in any event not less than

thirty-five years from the date of occupancy of any project, except as

may be provided in sections thirty-five and thirty-six of this article.

7. The number of directors, which shall not be less than three nor

more than twenty-one, and who shall be elected by the stockholders or

members of the corporation. Unless required by the certificate of

incorporation or the by-laws, directors need not be stockholders.

Directors appointed by the commissioner pursuant to subdivision fifteen

of this section or by the supervising agency pursuant to paragraph (c)

of subdivision sixteen of this section need not be stockholders or meet

other qualifications which may be prescribed by the certificate of

incorporation or the by-laws. In a corporation undertaking a state-aided

project one additional director may be designated by the commissioner,

and, in the case of all state-aided mutual companies, such additional

director shall be designated by the commissioner at the creation of the

company and shall serve from the time of such designation at least until

a board of directors has been elected by the tenants entitled to

occupancy in the project by reason of ownership of shares in such

company. In a corporation undertaking a municipally-aided project one

additional director may be designated by the supervising agency, and, in

the case of all municipally-aided mutual companies, such additional

director shall be designated by the supervising agency at the creation

of the company and shall serve from the time of such designation at

least until a board of directors has been elected by the tenants

entitled to occupancy in the project by reason of ownership of shares in

such company. The director appointed by the commissioner or the

supervising agency need not be a stockholder or meet other

qualifications which may be prescribed by the certificate of

incorporation or the by-laws. In the absence of fraud or bad faith the

director appointed by the commissioner hereunder or the supervising

agency or the directors appointed by the commissioner or by the

supervising agency pursuant to subdivision fifteen or paragraph (c) of

subdivision sixteen respectively of this section shall not be personally

liable for the debts, obligations or liabilities of the corporation.

Directors of a mutual housing company are to serve in that capacity

without salary but may be reimbursed for expenses incurred directly

relating to the duties of the director's office.

8. The names and post-office addresses of the directors until the

first annual meeting.

9. The names and post-office addresses of the subscribers to the

certificate, and a statement of the number of shares of stock which each

agrees to take in the company.

10. That, except in the case of a company to be aided by a loan from

the federal government or any agency or instrumentality thereof, or if

the mortgage or mortgage bonds which are to be used in financing the

company's project are to be insured by the federal government or any

agency or instrumentality thereof, the entire amount to be paid in cash

or property by the shareholders and income debenture holders shall be at

least five per centum of the project cost in the case of an urban rental

company and a mutual company. The provisions of this subdivision shall

not apply to a non-profit company incorporated pursuant to the

provisions of the not-for-profit corporation law and this article for

the purpose of providing housing for staff members, employees or

students of a college, university, hospital or child care institution

and their immediate families, or for aged or handicapped persons of low

income, nor to a municipally-aided non-profit company nor to a

municipally-aided mutual company, nor to a low income non-profit housing

company.

11. That, so long as this article shall remain applicable to any

project of the company, its real property shall not be sold,

transferred, encumbered or assigned except as permitted by the terms and

provisions of this article.

12. That all of the subscribers to the certificate are of full age,

that at least two-thirds of them are citizens of the United States, and

that at least one of the persons named as director is a citizen of the

United States and a resident of the state of New York.

13. That the company has been organized to serve a public purpose and

that it shall be and remain subject to the supervision and control of

the commissioner, or, if the company is organized to undertake a

municipally aided project, of the supervising agency, except as

otherwise provided in this article, so long as this article remains

applicable to any project of the company; that all real and personal

property acquired by it, and all structures erected or rehabilitated by

it, shall be deemed to be acquired, rehabilitated or created for the

proper effectuation of the purposes of this article, and that the

directors and subscribers of such company shall be deemed to have agreed

that they shall at no time receive or accept from such company in

repayment of their investment in its stock any sums in excess of the par

value of the stock, together with such dividends or other compensation

as are prescribed by or permitted under this article, and that, upon

dissolution of the company, any surplus remaining after the payment of

all its obligations shall be distributed and disposed of and title to

the property may be conveyed in fee, only as prescribed by this article.

14. The certificate may provide that in the event that income

debentures are issued by the company the owners thereof may be given the

same right to vote as they would have if possessed of certificates of

stock of the amount and par value of the income debentures held by them.

If provision is made for the issuance of income debentures interest

shall be paid by the company on income debentures only out of net

earnings of the company that would be applicable to payment of dividends

if there were no income debentures.

15. That in the event of a violation by a state-aided company of any

provision of the certificate of incorporation or of law or of the loan

or mortgage contract or any order of the commissioner or of any rules

and regulations duly promulgated pursuant to the provisions of this

article the commissioner may remove any or all of the existing directors

of the company and appoint such person or persons whom the commissioner

deems advisable, including officers and employees of the division of

housing and community renewal, as new directors to serve in the places

of those removed; that directors so appointed by the commissioner who

are officers or employees of the division of housing and community

renewal shall serve in such capacity without compensation; and that any

directors so appointed by the commissioner shall serve only for a period

coexistent with the duration of such violation or until the commissioner

is assured in a manner satisfactory to him against violations of a

similar nature.

16. If the company is organized to undertake a municipally-aided

project, such certificate shall contain:

(a) A declaration that the original directors, officers, subscribers

and income debenture holders possessing the right to vote, shall be

deemed at the time of accepting such offices, or subscribing to the

stock or income debentures to have agreed not to resign from the company

and not to sell their stock or income debentures prior to the completion

of the project and the certification of the total actual project cost by

the supervising agency, except with the consent of the supervising

agency.

(b) A declaration that the shares of stock and the income debentures

of the company shall be issued only in such amounts and form as may be

approved by the supervising agency and that no stock shall be redeemed,

purchased or retired and no income debentures shall be redeemed prior to

their dates of maturity or purchased or retired by the company during

the period in which the loan by the municipality is in force or for

which tax exemption is granted pursuant to section thirty-three of this

article, except with the consent of the supervising agency.

(c) A provision that in the event of a violation by the company of any

provision of the certificate of incorporation or of law or of the loan

or mortgage contract or of any rules and regulations duly promulgated

pursuant to the provisions of this article, the supervising agency may

remove any or all of the existing directors of the company and appoint

such person or persons which the supervising agency in its sole

discretion deems advisable, including officers or employees of the

supervising agency, as new directors to serve in the places of those

removed; that directors so appointed by the supervising agency who are

officers or employees of the supervising agency shall serve in such

capacity without compensation; and that any directors so appointed by

the supervising agency shall serve only for a period coexistent with the

duration of such violation or until the supervising agency is assured in

a manner satisfactory to it against violations of a similar nature.

(d) A provision that the supervising agency or its duly authorized

representative shall be notified in writing of and shall have the right

to attend all meetings of the board of directors or of the stockholders

and income debenture holders of the company.

(e) A provision that the sale of stock by a stockholder or the company

or the sale of income debentures, the holders of which possess the right

to vote, by any such holder or the company, shall be subject to the

consent of the supervising agency.

(f) Such other provisions, not inconsistent with law, as the

supervising agency may deem necessary to protect the investment of the

municipality and to carry out the purposes of this article.

17. The certificate of incorporation of a non-profit company

incorporated pursuant to the provisions of the not for-profit

corporation law and this article shall, in addition to all other matters

required by law to be stated therein, state:

a. That its purpose is to provide housing and auxiliary facilities for

staff members, employees or students of any college, university,

hospital, child care institution and their immediate families, for aged

or handicapped persons of low income, or for any one of the above

purposes, or to provide housing accommodations pursuant to the terms and

provisions of this article in the case of a municipally-aided non-profit

company, or to provide housing accommodations pursuant to the provisions

of this article in the case of a low income non-profit housing company;

b. That the directors or trustees are and at all times shall be

officers, directors or trustees of such college, university, hospital or

child care institution, or, in the case of a non-profit company

providing housing for aged or handicapped persons of low income or of a

municipally-aided non-profit company providing housing accommodations

pursuant to the terms and provisions of this article, or of a low income

non-profit housing company providing housing accommodations pursuant to

the provisions of this article, of a corporation organized pursuant to

the provisions of the not-for-profit corporation law;

c. That the property of such company shall upon dissolution vest in

such college, university, hospital, child care institution, or

not-for-profit corporation, and

d. That no part of the net earnings of such college, university,

hospital, child care institution or not-for-profit corporation shall

inure to the benefit of any private individual.

18. That the secretary of state is designated as the agent of the

company upon whom process in any action or proceeding against it may be

served.

§ 13-a — The applicability of not-for-profit corporation law

The applicability of not-for-profit corporation law. 1. The

not-for-profit corporation law applies to every company heretofore or

hereafter formed under this article and the not-for-profit corporation

law, provided that:

(a) If any provision of the not-for-profit corporation law conflicts

with any provision of this article, the provision of this article shall

prevail and the conflicting provision of the not-for-profit corporation

law shall not apply in any such case. If any provision of this article

relates to a matter embraced in the not-for-profit corporation law but

is not in conflict therewith, both provisions shall apply.

(b) The following provisions of the not-for-profit corporation law

shall not apply to companies formed pursuant to this article and the

not-for-profit corporation law:

Paragraphs (7) and (8) of subdivision (a) of section one hundred

twelve, section one hundred thirteen, section one hundred fourteen,

section two hundred one, section three hundred four, section three

hundred seven, section four hundred four, subdivision (3) of paragraph

(a) of section five hundred ten, section six hundred nine, section six

hundred seventeen, paragraphs (a) and (b) of section eight hundred four,

article nine, section ten hundred eleven, section ten hundred twelve,

article thirteen, article fourteen.

2. Every corporation to which the not-for-profit corporation law is

made applicable by this section is a charitable corporation as defined

in paragraph (a) of section one hundred two (Definitions) of the

not-for-profit corporation law for all purposes of that law.

§ 13-b — Verification of papers filed with supervising agency

Verification of papers filed with supervising agency. Any

document required to be filed with the supervising agency regarding

rental units, either state or municipal, shall be duly verified under

oath of the corporation or individual filing the same. The commissioner

or head of such supervising agency may restrict the required

verification to such documents as relate to financial statements and all

other data submitted in support of an application for an increase of

rents.

§ 13-c — Voting, election and referendum procedures

Voting, election and referendum procedures. 1. Any shareholder

vote involving the election of board members, by-law amendments, or on

dissolution or reconstitution or conversion of a mutual housing company

including any votes for a special assessment pursuant to subdivisions

one, two or three of section thirty-five-a of this article shall be

conducted using secret ballots. Such ballots shall be cast in-person by

tenants entitled to vote in the project; unless such tenant casts such

ballot using an absentee ballot issued pursuant to subdivision two of

this section.

2. Any shareholder entitled to vote may request an absentee ballot to

cast a ballot in any shareholder vote. Such an absentee ballot may be

delivered or mailed only to the primary residence address of the

shareholder entitled to vote in the project. An absentee ballot cast

pursuant to this subdivision shall be sealed within two envelopes and

shall be mailed or delivered to a neutral third party not running for a

position on the board of directors. The outer envelope containing the

ballot shall instruct the shareholder to affix their signature to the

outer envelope only, and further instruct the shareholder not to sign

the ballot itself.

3. Proxy voting shall not be permitted in a vote for a position on a

board of directors, for dissolution or reconstitution of the mutual

housing company, for the authorization of a feasibility study, for the

authorization to develop and submit to the attorney general an offering

plan for dissolution and reconstitution of the mutual housing company,

for the authorization to develop and submit to the attorney general a

proxy statement or any other documents permitted by the attorney general

instead of such offering plan, or any other vote relating to dissolution

or reconstitution required by the regulations of the commissioner or

supervising agency, or for an assessment approved pursuant to section

thirty-five-a of this article to fund the development, submission,

completion, or distribution of any of the aforementioned documents.

4. All ballots shall produce a paper or electronic record which may be

audited in the case of a contested election result.

5. No otherwise-eligible person shall be prevented from being a

candidate for, being elected to, or serving on a board of directors

based solely on that person owing or having owed any amount of any form

of arrears to the mutual housing company, unless, at the time of

nomination, that person currently owes an amount of arrears greater than

the equivalent of two months of that person's monthly maintenance.

Nothing in this subdivision shall be construed to require or mandate any

mutual housing company to adopt bylaws, rules, policies, or procedures

restricting any person's eligibility to be nominated, elected, or serve

on a board of directors. No grounds other than the above arrearages in

excess of two months maintenance shall be a basis in itself to deny such

eligibility to any person unless specifically incorporated in

regulations promulgated by or procedures approved by the commissioner or

supervising agency. Neither a mutual housing company nor the

commissioner or the supervising agency may modify in any way the above

limitation so as to restrict eligibility on the basis of fewer than two

months of arrears.

§ 14 — Consent of commissioner to incorporation

Consent of commissioner to incorporation. Whenever any such

certificate shall be presented to the secretary of state, he shall not

file such certificate unless there shall accompany the same a

certificate of the commissioner that he consents to the filing of such

certificate; nor shall any amendment to the certificate of incorporation

be filed unless it is accompanied by a certificate of the commissioner

consenting thereto. If a company has entered into a contract with a

municipality for the construction of a municipally aided project, the

commissioner shall not issue a certificate consenting to an amendment of

the certificate of incorporation of such company, unless the supervising

agency has given its written consent to such amendment.

§ 15 — Participation by certain corporations and individuals

Participation by certain corporations and individuals. 1. (a)

One or more banking organizations, foundations, labor unions, employers'

associations, veterans' organizations, colleges, universities,

educational institutions, child care institutions, hospitals, medical

research institutes, insurance companies, trustees, fiduciaries or any

combination of the foregoing, shall have the power to organize a company

pursuant to the provisions of this article, and to purchase for cash or

to receive and hold in exchange for property, and to own the bonds of a

company and to invest, singly or jointly, or with the state or a

municipality or the New York state housing finance agency or the New

York city housing development corporation in a bond or note and single

participating mortgage, or in separate bonds or notes and mortgages, in

an amount not greater than ninety-five per centum of the total project

cost in the case of a mutual company, urban rental company or a

non-profit company incorporated pursuant to the provisions of the

not-for-profit corporation law and this article for the purpose of

providing housing for staff members, employees or students of a college,

university, child care institution, or hospital and their immediate

families and in the case of a non-profit company incorporated pursuant

to the not-for-profit corporation law and this article for the purpose

of providing housing for aged persons of low income or in the case of a

low income non-profit housing company such investment shall not be

greater than the total project cost. Where one or more banking

organizations, foundations, labor unions, employers' associations,

veterans' organizations, colleges, universities, educational

institutions, child care institutions, hospitals, medical research

institutes, insurance companies, trustees, fiduciaries, or the state or

a municipality or the New York state housing finance agency or the New

York city housing development corporation, shall participate in a loan

to a company secured by a single participating mortgage or by separate

mortgages, the interest of each shall have equal priority as to lien in

proportion to the amount of loan so secured, but need not be equal as to

interest rate, time or rate of amortization or otherwise. Banking

organizations, foundations, labor unions, employers' associations,

veterans' organizations, colleges, universities, educational

institutions, child care institutions, hospitals, medical research

institutes, insurance companies, trustees, fiduciaries or groups

thereof, may exercise any such power on such conditions, however, as to

banking organizations and as to insurance companies only to the extent

and upon such conditions as may be authorized by the state

superintendent of financial services. As used in this subdivision, the

terms "trustees" and "fiduciaries" shall include any fiduciary or

fiduciaries holding funds for investment, and the term "banking

organizations" shall have the same meaning as in subdivision eleven of

section two of the banking law.

(b) Notwithstanding the provisions of paragraph (a) of this

subdivision or of any general, special or local law, for the purpose of

completing the financing of project cost, in the event that a

municipality has made or contracted to make a loan to a company or to a

public benefit corporation to provide moneys to finance the project cost

of a project (1) the construction of which commenced prior to December

first, nineteen hundred seventy-five, (2) for which a temporary or

permanent certificate of occupancy was not issued prior to January

first, nineteen hundred seventy-three, and (3) which is assisted by a

contract with the secretary of housing and urban development of the

United States pursuant to section two hundred thirty-six of the national

housing act, as amended, covering all dwelling units therein, one or

more banking organizations as defined in paragraph (a) of this

subdivision, foundations, labor unions, credit unions, employers'

associations, veterans' organizations, colleges, universities,

educational institutions, child care institutions, hospitals, medical

research institutes, insurance companies, trustees or fiduciaries as

defined in paragraph (a) of this subdivision, trustees of pension and

retirement funds and systems, corporations, partnerships, individuals,

or other entities or any combination of the foregoing shall have the

power to participate in such loan or make or participate in a new loan

secured by a bond or note and a single participating mortgage, or by

separate bonds or notes and separate mortgages, or to invest, singly or

jointly, with the municipality in a bond or note and single

participating mortgage or in separate bonds or notes and mortgages, upon

such terms and conditions as may be approved by the supervising agency,

including but not limited to provisions providing that (i) priority may

be given to the payment of the principal of and interest on that portion

of the mortgage indebtedness attributable to participation in a loan or

an investment made by one or more of such entities or organizations,

(ii) the interest of the municipality created as a result of making a

mortgage loan may be subordinated to the interest that one or more of

such organizations or entities may have upon such participation or

investment, (iii) the interest of each upon such participation or

investment need not be of equal priority as to lien, nor be equal as to

interest rate, time or rate of amortization of principal or time of

payment of interest, or otherwise, provided, however, that the aggregate

amount of the loan or loans or investment made by one or more of such

organizations or entities shall not exceed thirty per centum of total

project cost and, further provided that the aggregate amount of the loan

or loans to a company does not exceed such amount as is authorized

pursuant to paragraph (a) of this subdivision. All or part of the

proceeds of such participation or investment pursuant to this paragraph

(b) may be applied to reduce or prepay the loan made by the

municipality. The provisions of subdivisions one and five of section

twenty-six of this article shall not apply to such participation in a

loan or investment pursuant to this paragraph (b) if undertaken in

connection with a project theretofore approved pursuant to said section

twenty-six.

Notwithstanding the provisions of this article or of any general,

special or local law, in the event that a municipality has made a loan

pursuant to this article prior to any participation pursuant to this

paragraph, the supervising agency shall have the power, upon the

mortgagor's consent, to modify the terms and conditions of the original

bond or bonds or note or notes and mortgage and any other documents

executed in connection with such initial loan, as the supervising agency

may deem necessary or desirable, to provide for such participation,

including but not limited to modification of the rate and time of

payment of the interest on the initial loan or rate of amortization of

principal thereof, and provision for the additional borrowing cost, if

any, with respect to that portion of the mortgage indebtedness

attributable to such participation, provided, that except to the extent

of any increase in the maximum principal amount of the original mortgage

loan, with regard to a company that has obtained a temporary or

permanent certificate of occupancy for part or all of a project financed

by a loan pursuant to this article before such participation in a loan

or investment is made, the sum of the payments of interest and principal

on the mortgage loan or loans which the company is obligated to make in

any year as a result of such modification and participation in a loan or

investment made pursuant to this paragraph, shall not exceed the sum of

the payments of interest and principal that such company would have been

obligated to make in such year under the original mortgage loan

agreement if the project had been fully financed under the original

mortgage loan agreement by the municipality at an interest rate equal to

the maximum rate per annum prescribed by the superintendent of financial

services pursuant to section fourteen-a of the banking law as of

December nineteenth, nineteen hundred seventy-five, or such higher rate

of interest as the secretary of housing and urban development of the

United States shall approve pursuant to an agreement to make interest

reduction payments pursuant to section two hundred thirty-six of the

national housing act, as amended, with respect to such project and that

the rental or carrying charges in such projects shall not be increased

as a result of such participation in a loan or investment and further

provided, that the company shall not seek or accept from the

municipality any subsidy, direct or indirect, excluding existing tax

exemption, to offset any increased borrowing costs, if any.

(c) Where the state or a municipality shall join with one or more

organizations of the kind hereinabove mentioned, in making a loan

secured by a single participating mortgage or by separate mortgages, the

state or a municipality is authorized, through the commissioner of

housing, or the supervising agency, as the case may be, to make

provision, either in the mortgage or mortgages or by separate agreement,

for the performance of such services as are generally performed by a

banking institution or insurance company which itself owns and holds a

mortgage or by a trustee under a trust mortgage. The commissioner and

the supervising agency are hereby authorized to act as trustee or to

consent to the appointment of a banking institution to act in such

capacity. Any agreement made by the commissioner under this provision

shall be subject to the approval by the state comptroller and the

attorney general as to form.

(d) In connection with any participation in a loan or investment

pursuant to paragraph (b) of this subdivision the municipality shall

have the power to assign or pledge, in whole or in part, to one or more

of the organizations or entities participating in such loan its right,

title and interest in and to any mortgage held pursuant to this article

and any contract or arrangement for the payment of subsidy with respect

to such loan and the right to receive and apply to repayment of such

loan and the interest thereon any payments made under such mortgage or

under such contract or arrangement.

2. Notwithstanding any other provision of law, any banking institution

or insurance company or a group thereof operating a company, or owning

all of the bonds of a company may exercise all the powers conferred by

this section and may enter into contracts contemplated by this article

and agree with the commissioner not to sell, assign, or otherwise

transfer such project or bonds or bond and mortgage or interest therein

of such company provided for pursuant to this article without the

consent of the commissioner.

§ 16 — Limited-profit housing companies; partnership relations

Limited-profit housing companies; partnership relations.

Notwithstanding any provisions in this article to the contrary, but

subject to such regulations as may be prescribed by the commissioner or

the supervising agency, as the case may be:

1. (a) Any company may be a partner (general or limited) in a

partnership (general or limited) formed for the purpose of providing

such company with capital. Any company incorporated pursuant to the

provisions of this article may, with the consent of the commissioner or

the supervising agency as the case may be, become a partner (general or

limited) in a partnership (general or limited) upon the consent of the

company to the refinancing of its original mortgage loan by a mortgage

loan insured by the Federal government; such a partnership shall have

the same powers and duties as provided by this article as a partnership

formed for the purpose of providing a company with capital.

(b) Any partner (general or limited) of any partnership (general or

limited) in which a company is a partner (general or limited) may be the

owner or holder of any shares, bonds, income debentures, notes or other

securities of such company.

(c) Any company which is a partner (general or limited) in any such

partnership (general or limited) may exercise all the rights and powers

and shall be subject to all the duties and obligations of a company in

accordance with this article.

2. The capital structure of a company which is a partner (general or

limited) in a partnership (general or limited) formed pursuant to

paragraph (a) of subdivision one of section sixteen may include

withdrawals from the capital of such a partnership (general or limited).

The provisions of this article relating to shares and income

debentures shall be deemed to include withdrawals from the capital of a

partnership (general or limited) of which a company is a partner

(general or limited).

3. For the purposes of this section, the term partner shall be deemed

to include a member of a limited liability company, and the term

partnership shall be deemed to include a limited liability company,

provided there is disclosure of the identity of the managing member,

including the identity of the natural person who is responsible for the

housing development. Notwithstanding any provision of this section to

the contrary, any change in general partner of a partnership or managing

member of a limited liability company shall be subject to the prior,

written approval of the commissioner or supervising agency.

§ 17 — Powers

Powers. 1. Subject to the limitations of this article, a company

heretofore or hereafter organized under this chapter shall have the

powers and be subject to the limitations contained in the business

corporation law or the not-for-profit corporation law, as the case may

be, and shall have the following additional specific powers:

(a) To make and execute contracts and other instruments necessary or

convenient in the exercise of its powers;

(b) To acquire or contract to acquire from any person, firm,

corporation, municipality, federal or state agency, by grant, purchase,

condemnation or otherwise, leaseholds, real, personal or mixed property

or any interest therein, and to sell, assign, exchange, transfer,

mortgage or encumber the same;

(c) To own, hold, clear and improve, leasehold, real, personal or

mixed property or any interest therein;

(d) To construct, reconstruct, rehabilitate, improve, alter or repair

or provide for the construction, reconstruction, improvement, alteration

or repair of any project;

(e) To lease or rent any of the housing or other accommodations or any

of the lands, buildings, structures or facilities embraced in any

project and establish and revise the rents or charges therefor; or to

purchase or lease a project or a part thereof from an authority,

pursuant to the provisions of section fifty-eight or article twelve-b of

this chapter.

(f) To arrange or contract with a municipality for the planning,

replanning, opening, grading or closing of streets, roads, roadways,

alleys or other places or for the furnishing of facilities or for the

acquisition by a municipality of property or property rights or for the

furnishing of property or services in connection with a project;

(g) To insure or provide for the insurance of its property or

operations as required by law and also against such other risks as it

may deem advisable;

(h) To limit by contract the exercise of any of its powers;

(i) To invest any funds held in reserves or sinking funds, or any

funds not required for immediate disbursement in property or securities

in which savings banks may legally invest funds subject to their

control;

(j) To sue and be sued;

(k) To have a seal and alter the same at pleasure;

(l) To make and from time to time amend and repeal by-laws, rules and

regulations not inconsistent with the provisions of this article;

(m) To sell, lease, or otherwise convey all or any part of a project

to an authority upon such terms and conditions as shall have the prior

approval of the commissioner or the supervising agency, as the case may

be;

(n) A non-profit company incorporated pursuant to the not-for-profit

corporation law and this article for the purpose of providing housing

and auxiliary facilities for staff members, employees or students of any

college, university, hospital, child care institution and their

immediate families; for aged or handicapped persons of low income or for

any one of the above purposes, may, with the prior written consent of

the commissioner or the supervising agency, as the case may be, lease

its project or any part thereof to any colleges, universities,

hospitals, child care institutions or not-for-profit corporations. A

lessee of a project may sublease all or any part of the project to

institutions and not-for-profit corporations which would be an eligible

sponsor pursuant to the provisions of this chapter and to staff members,

employees, and students of any college, university, hospital, child care

institution, and to aged and handicapped persons of low income. Any

property so leased or subleased shall remain subject to the provisions

of this article and to the rules and regulations of the commissioner, or

supervising agency, as the case may be. A lease or sublease of the

entire project may provide for the assumption by the lessee or sublessee

of the management and control of the project, and all of the obligations

thereof, as well as the right to collect all revenues accruing thereto.

In any event, the lessee shall pay rental in an amount at least equal to

the interest and amortization due upon the mortgage of the property so

leased.

(o) To lease to any authority, or to a municipality in connection with

any federally-aided program to provide dwelling accommodations for

persons of low income, one or more dwelling units in a project upon such

terms and conditions as shall have the prior written approval of the

commissioner or the supervising agency, as the case may be.

(p) To lease, with or without an option to purchase, all or any part

of a project to any person, firm, partnership, trust or corporation,

subject to the prior written consent of the commissioner or the

supervising agency, as the case may be. Any property so leased shall

remain subject to the provisions of this article and to the rules and

regulations of the commissioner or the supervising agency, as the case

may be. Such lease may provide for the assumption by the lessee of the

management and control of the project, as well as the right of the

lessee to collect all revenues accruing thereto.

To do all other things necessary or convenient to carry out its

powers.

2. A company shall file with the commissioner or the supervising

agency, as the case may be, a copy of any by-laws, rules, regulations

and amendments thereto adopted by it from time to time, which shall

become effective upon approval by the commissioner or by the supervising

agency; provided, however, that if the commissioner or the supervising

agency shall fail to approve or disapprove such proposed by-laws within

three months after such filing, such by-laws shall become effective upon

the expiration of such three month period. These by-laws, rules,

regulations and amendments shall contain such provisions relating to the

management of its business, the regulation of its affairs, the calling

of meetings, the manner of selection of officers and trustees and such

other provisions as may be reasonable and necessary.

3. Notwithstanding the provisions of any law, general or special, a

mutual company may, with the approval of the commissioner or the

supervising agency, as the case may be, require a standard form and

procedure for the casting of proxies or absentee ballots in any matter

requiring a shareholder vote.

4. Notwithstanding the provisions of any law, general or special, a

board of directors of a mutual housing company created pursuant to the

provisions of this article shall:

(a) Hold at least four meetings of the board of directors annually.

Such meetings shall be open to all shareholders and residents, except

that they may include executive sessions open only to directors for the

sole purpose of discussing confidential personnel issues, legal advice

and counsel from an attorney to whom the mutual housing company is a

client, or confidential issues affecting individual shareholders or

residents, or contract negotiation. Any such board of directors meetings

held in addition to the minimum number of four as required by this

section shall be open to shareholders and residents, and subject to the

aforementioned exception regarding executive sessions.

(b) Maintain a record of any vote on a resolution of such board,

including specification of how each director voted. Such record shall be

a matter of public record which will be made available as a paper copy

at the request of a shareholder and will also be posted on a website

that is accessible by all shareholders maintained by the board of

directors, provided however, that there may be redactions to the extent

minutes would reflect the discussions held in executive session.

(c) Promptly post on a website available to all shareholders and

maintained by the board of directors to communicate with shareholders,

(i) any request by the mutual housing company to the commissioner or the

supervising agency, as the case may be, and any final resolution

regarding such request, when the request relates to a change in

regulations, a change in its real estate taxation, in a refinancing,

financing being offered by the commissioner, supervising agency, or any

other agency or, a proposed dissolution and reconstitution, (ii) any

deficiency letters issued by the office of the attorney general to the

mutual housing company regarding an offering plan for dissolution and

reconstitution of the mutual housing company, any deficiency letters

issued by the office of the attorney general to the mutual housing

company regarding a proxy statement or any other documents permitted by

the attorney general instead of such offering plan, and any of the

mutual housing company's resubmissions of such offering plan or proxy

statement or any other documents permitted by the attorney general

instead of such offering plan in response to such deficiency letters

issued by the office of the attorney general, or (iii) any offer of

financing from the commissioner, supervising agency, or any other agency

to the mutual housing company.

5. (a) No mutual housing company shall interfere with the right of a

shareholder or tenant to form, join or participate in the lawful

activities of any group, committee or other organization formed to

protect the rights of shareholders and tenants; nor shall any mutual

housing company harass, punish, penalize, diminish, or withhold any

right, benefit or privilege of a shareholder or tenant under their

proprietary lease or tenancy for exercising such right.

(b) Shareholder and/or tenants' groups, committees or other

shareholder and/or tenants' organizations shall have the right to meet

without being required to pay a fee in any location on the premises

including a community or social room where use is normally subject to a

fee which is devoted to the common use of all shareholders and/or

tenants in a peaceful manner, at reasonable hours and without

obstructing access to the premises or facilities. Nothing in this

subdivision shall be construed to limit or impede the authority of the

board of directors to act on behalf of the mutual housing company or

regulation by the commissioner or supervising agency with respect to the

recognition of a tenant group representing all tenants, or to require

the continued recognition of a cooperators' advisory council formed

pursuant to subdivision one of section thirty-two-a of this article when

superseded by the election of a board of directors.

§ 18 — Designation of and service of process on secretary of state and registered agent

Designation of and service of process on secretary of state and

registered agent. The provisions of sections three hundred four, three

hundred five and three hundred six of the business corporation law shall

apply to companies heretofore or hereafter organized pursuant to the

provisions of this article.

§ 19 — Consideration for issuance of stock, bonds or income debentures

Consideration for issuance of stock, bonds or income debentures.

No company shall issue stock, bonds, or income debentures except for

money or property actually received for the use and lawful purposes of

the company, provided, however, that a mutual company may issue stock

for home owners purchase notes if the purchase transaction has received

the written endorsement of the commissioner in accordance with

supplementary rules and regulations of the commissioner made therefor

and if at least two hundred dollars in money or property is received by

such company toward the issuance of such stock. No stock, bonds or

income debentures shall be issued for property except upon a valuation

approved by the supervising agency or by the commissioner, as the case

may be, and such valuations shall be used in computing the estimated or

actual project cost.

§ 20 — Mortgages, mortgage bonds and notes

Mortgages, mortgage bonds and notes. 1. Any company, subject to

the approval of the commissioner or of the supervising agency, as the

case may be, may borrow funds and secure the repayment thereof by bond

or note and mortgage or by an issue of bonds under a trust indenture.

2. Each loan made to a company shall relate to one or more specified

projects and shall be secured by a mortgage upon all of the real

property of which the project or projects, to which the loan relates,

consists, and upon all fixtures and articles of personal property

attached to or used in connection with the operation of such project or

projects. Such mortgages may contain such other clauses and provisions

as shall be approved by the commissioner, or the supervising agency, as

the case may be, including the right to assignment of rents and entry

into possession in case of default; but the operation of such project or

projects, in the event of such entry by a mortgagee or receiver, except

in the case of a mortgage loan insured or held by the federal

government, shall be subject to regulations promulgated by the

commissioner or the supervising agency. Provisions for the amortization

of the mortgage indebtedness and residual indebtedness of companies

formed under this article shall be subject to the approval of the

commissioner or the supervising agency, as the case may be. In the case

of an instrument or instruments evidencing residual indebtedness issued

pursuant to section twenty-three-a or section forty-four-b of this

chapter, the principal amount of such instrument or instruments and the

interest thereon, if any, shall be repaid over a period of time not

exceeding the term over which the mortgage loan insured by the federal

government is to be repaid, plus ten years, which period of time shall

commence at such time as the commissioner or the supervising agency

shall approve, provided, however, that such period of time shall not

expire more than fifteen years after the mortgage loan insured by the

federal government has been satisfied.

§ 21 — Capital structure

Capital structure. The capital structure of a company

undertaking a project and the proportionate amount of the project cost

to be represented by mortgages, bonds, notes, income debentures and

shares shall be subject to the approval of the commissioner except as

otherwise provided in section twenty-three with respect to a

municipally-aided project. The shares and income debentures issued by a

mutual company or urban rental company, other than a non-profit company

incorporated pursuant to the provisions of the not-for-profit

corporation law and this article for the purpose of providing housing

for staff members, employees or students of a college, university,

hospital or child care institution and their immediate families or for

aged or handicapped persons of low income, and other than a

municipally-aided non-profit company or a municipally-aided mutual

company, and other than a low income non-profit housing company, shall

not be less than the total of five per centum of the project cost. The

shares, bonds or notes, income debentures and mortgages covering any

project shall not exceed the actual project cost.

The provisions of this section with respect to the proportionate

amount of the project cost to be represented by mortgages, bonds, notes,

income debentures and shares shall not be applicable to any housing

company project, if funds made available by the federal government or

any agency or instrumentality thereof are used in financing the project,

in whole or in part, or if a mortgage or mortgage bonds issued with

respect to such project are insured by the federal government or any

agency or instrumentality thereof.

§ 22 — State loans

State loans. 1. The commissioner may enter into contracts for

loans to a company. All such contracts shall be subject to approval by

the state comptroller and by the attorney general as to form.

2. Loans by the state under such a contract shall be secured by a

first mortgage lien, and no such loan shall be made in an amount greater

than ninety-five per centum of the total project cost in the case of a

mutual company, urban rental company or a non-profit company

incorporated pursuant to the provisions of the not-for-profit

corporation law and this article for the purpose of providing housing

for staff members, employees or students of a college, university,

hospital or child care institution and their immediate families and in

the case of a non-profit company incorporated pursuant to the

not-for-profit corporation law and this article for the purpose of

providing housing for aged or handicapped persons of low income or in

the case of a low income non-profit housing company such loans shall not

be made in an amount greater than the total project cost. In case of a

loan in an amount greater than ninety-five per centum of the total

project cost, the commissioner may in his discretion require

satisfactory independent guarantees that the loan will be repaid

according to the terms of the company's bond or note and mortgage.

Notwithstanding any other provisions of law, if the company proposes to

sell or convey any part or parts of the mortgaged premises prior to the

sale by the state of the definitive bonds providing the funds for the

state loan, the comptroller, upon the application of the company and

with the prior written consent of the commissioner, may release from the

first mortgage lien any part or parts of the mortgaged premises not

acquired through condemnation and not required for the project, provided

that any net proceeds from the sale or conveyance of the said property

will be held by the company for the sole purpose of reducing, in

accordance with the requirements of the commissioner and comptroller,

the principal amount of the state loan outstanding, and provided further

that the unpaid principal amount of the state loan then outstanding, as

it may be reduced by the net proceeds, if any, derived from the sale or

conveyance, would not be in an amount greater than ninety-five per

centum of the total project cost and in the case of a non-profit company

incorporated pursuant to the provisions of the not-for-profit

corporation law and this article for the purpose of providing housing

for aged or handicapped persons of low income or in the case of a low

income non-profit housing company such amount shall not be greater than

the total project cost. The comptroller shall execute such release in

the usual form, which, when acknowledged, shall be recorded by the

county clerk and a minute thereof made upon a margin of the mortgage. A

company may, with the prior written consent of the commissioner, and

subject to the approval of the state comptroller and to the provisions

of any contract with noteholders and bondholders, lease any property not

acquired through condemnation and not required for the project, and may

apply the income of such lease to any use authorized for any other

rental income. Such lease shall contain restrictions to protect and

preserve the project.

3. The commissioner may make temporary loans or advances to a company

in anticipation of any permanent loans and no such temporary loans or

advances shall be deemed to constitute part of such permanent loans

unless such temporary loans or advances have been made out of the

proceeds of definitive housing bonds sold by the state pursuant to

chapters four hundred seven of the laws of nineteen hundred fifty-five

and nine hundred fifty-six of the laws of nineteen hundred fifty-eight.

4. The state shall have the power to invest jointly with the New York

state housing finance agency in a bond or note and single participating

mortgage, or in separate bonds or notes and mortgages of a company

organized pursuant to the provisions of this article. The interest of

each shall have equal priority as to lien in proportion to the amount of

loan so secured, but need not be equal as to interest rate, time or rate

of amortization or otherwise. In such a case the state, through the

commissioner of housing, is authorized to make provision, either in the

mortgage or mortgages or by separate agreement, for the performance of

such services as are generally performed by the New York state housing

finance agency itself owning and holding a mortgage. Any agreement made

by the commissioner under this subdivision shall be subject to the

approval of the state comptroller and the attorney general as to form.

§ 22-a — Redevelopment loans

Redevelopment loans. Notwithstanding any provision of this

article to the contrary, where a state-aided project undergoes a

comprehensive redevelopment plan, the commissioner may approve a loan

and encumbrance of such project in an amount in excess of actual project

cost within the meaning of section twenty-one of this article, provided

that such amount represents cost of capital improvements, redevelopment

or acquisition by a new owner, any consequent rent increase is not

unduly burdensome to the tenants, and the company enters into an

agreement to remain subject to the provisions of this article for a

period of no less than an additional fifteen years from issuance of the

loan and encumbrance.

§ 22-b — Loans for state-aided limited-profit housing companies

Loans for state-aided limited-profit housing companies. 1.

Notwithstanding any provision of this article to the contrary, the

commissioner may for a period of one year from the effective date of

this act approve a loan and encumbrance in excess of the actual project

cost of a state-aided project comprising more than five thousand rental

units, provided that: (a) the rents paid by the tenants may not be

increased to pay for any consequent increase in indebtedness that is not

attributable to project cost; (b) the company enters into an agreement

to continue to remain subject to the provisions of this article for a

period of no less than an additional thirty years from issuance of the

loan and encumbrance; and (c) the greater of twenty-five percent of the

amount of such loan which exceeds such actual project cost or forty

million dollars of the proceeds of such loan must be dedicated to

capital improvements to existing structures and facilities.

2. Any company that enters into a loan pursuant to subdivision one of

this section shall create a plan within one year of the approval of the

loan. The plan shall include details of all capital improvements that

will occur as a result of the loan. Such company shall obligate the

funds dedicated to the capital improvements within three years of the

approval of the loan. Such company shall submit a copy of the plan

within one year of the approval of the loan and within three years of

the approval of the loan, a report that details the use of the loan

funds to the governor, the commissioner of the division of housing and

community renewal, the temporary president of the senate, the speaker of

the assembly, the minority leader of the senate, the minority leader of

the assembly, the chair of the senate finance committee, the chair of

the assembly ways and means committee, the chair of the senate housing,

construction, and community development committee, and the chair of the

assembly housing committee.

3. Such company shall participate in bimonthly meetings with elected

officials and the members of the project's residents' association or

other tenant organization that represents the majority of tenants in the

project in order to hear any advice or comments on the implementation of

the plan. The meetings shall occur on a regular basis until all of the

money set-aside for capital improvements in subdivision one of this

section has been spent.

§ 23 — Municipal loans and municipally aided projects

Municipal loans and municipally aided projects. 1. A

municipality may make or contract to make loans to a company or to a

public benefit corporation providing housing for staff members,

employees or students of a college, university, hospital or child care

institutions and their immediate families in an amount not to exceed,

except in the case of a non-profit company incorporated pursuant to the

provisions of the not-for-profit corporation law and this article for

the purpose of providing housing for aged or handicapped persons of low

income, and except in the case of a company or public benefit

corporations providing housing for staff members, employees or students

of a college, university, hospital or child care institution and their

immediate families, and except in the case of a municipally-aided

non-profit company or of a municipally-aided mutual company, and except

in the case of a low income non-profit housing company, ninety-five per

centum of the project cost to be secured, except as provided in section

fifteen of this article, by a first mortgage lien and may make temporary

loans or advances to a company in anticipation of a permanent municipal

loan. In the case of a non-profit company incorporated pursuant to the

provisions of the not-for-profit corporation law and this article for

the purpose of providing housing for aged or handicapped persons of low

income and in the case of a company or public benefit corporations

providing housing for staff members, employees or students of a college,

university, hospital or child care institution and their immediate

families, and in the case of a municipally-aided non-profit company or

of a municipally-aided mutual company, and in the case of a low income

non-profit housing company, such loans may not exceed the total project

cost. Notwithstanding the foregoing, such loans to a municipally-aided

mutual company to assist in financing the acquisition of a building by

residents thereof may not exceed ninety-five per centum of the project

cost. Such mortgage, or bonds or notes secured thereby and such contract

may contain such terms and conditions not inconsistent with the

provisions of this article as the local legislative body may deem

necessary or desirable to secure repayment of its loan, the interest

thereon and other charges in connection therewith. In the case of a loan

in an amount greater than ninety-five per centum of the total project

cost the supervising agency may in its discretion require satisfactory

independent guarantees that the loan will be repaid according to the

terms of the company's bond or note and mortgage.

1-a. Notwithstanding any other provision of this article or any other

law, any such loan may be made to a company at such rate of interest, if

any, as the local legislative body may deem necessary or desirable to

carry out the policy and purposes of this article.

2. The supervising agency shall have exclusive power to promulgate

such supplementary rules and regulations with respect to a

municipally-aided project and a company formed to undertake or operate

any such project, as may be necessary to carry out the provisions of

this article. No assignment for collateral or pledge by a municipality

of its mortgage interest in a municipally-aided project to the state or

to any political subdivision thereof shall either affect the power of

the supervising agency granted herein or authorize the commissioner to

exercise any powers not otherwise granted in this article.

3. Prior to the date of approval by the local legislative body of the

contract between a municipality and a company for a municipally aided

project, the total estimated project cost of such project, the estimated

capital requirements of the company formed to undertake or operate such

project, the initial capital structure of such company and a

modification of any of the foregoing items, shall be subject to the

approval of the supervising agency and the commissioner. Any

modification of any of the foregoing items made after such date of

approval of the contract shall be subject solely to the approval of the

supervising agency. If after such date of approval of the contract, any

change is made in such contract which requires the approval of the local

legislative body, such change shall also be subject to the prior

approval of the commissioner.

4. The commissioner shall have the power, prior to the date of

approval by the local legislative body of a contract between a company

and the municipality for a municipally aided project, to approve the

proposed maximum average of the rentals to be charged for the dwellings

in the project, or any modifications thereof. After such date of

approval of the contract, the supervising agency shall have sole power

to increase or reduce the rental rate for the dwellings in the project

in the manner prescribed by section thirty-one of this article for the

variance of the rental rates. However, if a variance in such rental rate

is made necessary because of a change in the project which requires the

approval of the local legislative body, the prior approval by the

commissioner of such variance of the rental rate shall also be obtained.

5. The commissioner and the supervising agency shall each have full

power to investigate into and order a company undertaking or operating a

municipally aided project to furnish such reports and information as

each may require concerning the planning, construction, acquisition,

rehabilitation, management or operation of the project.

6. The commissioner shall have the power to audit the books of a

company undertaking or operating a municipally aided project solely as

to the legality of the expenditures and to disallow any expenditure

which the commissioner shall find has been made in violation of law or

any rule or regulation duly issued pursuant to this article. The

supervising agency shall have the full power to audit the books of any

such company as to the legality, reasonableness or necessity of its

expenditures. Any expenditure disallowed by the commissioner or the

supervising agency on such audits shall not be included in any

construction, management or operating costs in connection with any

application to increase or reduce the rents or carrying charges in a

project.

7. (a) At the direction of the supervising agency, with the consent

and approval of the mayor the municipality shall establish and keep a

separate fund known as the limited-profit mortgage reserve fund for the

purposes of insuring the municipality against any loss resulting from

the making of a mortgage loan, temporary loan or advance to a

municipality-aided project and to protect the municipality in the event

of delinquency in the repayment of such mortgage loan, temporary loan or

advance.

(b) There shall be paid into such fund the portions of fees allocated

to and directed to be deposited in such fund by the supervising agency

with the consent and approval of the mayor as provided for in

subdivision seven of this section. In addition, there shall be credited

to and deposited in such fund any portion of the unexpended balance

remaining in the housing fund as the supervising agency with the consent

and approval of the mayor may determine to be in excess of the amounts

needed to meet expenditures required to be paid from the housing fund.

(c) The monies in the limited-profit mortgage reserve fund shall be

deposited in one or more of the banks or trust companies designated, in

the manner provided by law, as depositories of the funds of such

municipal corporation. The comptroller or the chief fiscal officer may

invest the monies in such fund in obligations specified in paragraph d

of this subdivision. Any interest earned or capital gain realized on the

money so deposited or invested shall accrue to and become part of such

fund. The separate identity of such fund shall be maintained whether its

assets consist of cash or investments or both.

(d) Monies in such fund may be invested (1) in special time deposit

accounts in, or certificates of deposit issued by, a bank or trust

company located and authorized to do business in this state, provided,

however, that such time deposit account or certificate of deposit shall

be payable within such time as the proceeds may be needed to meet

expenditures for which such monies were obtained and provided further

that such time deposit account or certificate of deposit be secured by a

pledge of obligations of the United States of America or obligations of

the state of New York or obligations of any municipal corporation,

school district or district corporation of the state of New York; or (2)

in obligations of the United States of America, obligations of the state

of New York or obligations of the municipal corporation which has

established such mortgage insurance fund provided: (i) such obligations

are not tax exempt; (ii) such obligations shall be payable or redeemable

at the option of the owner within such times as the proceeds may be

needed to meet expenditures for purposes for which the monies so

invested were obtained, and (iii) such obligations, unless registered or

inscribed in the name of the municipal corporation for which such

investment is made, shall be purchased through, delivered to and held in

custody of a bank or trust company in this state and shall be sold or

presented for redemption or payment only by such bank or trust company

upon written instructions from the comptroller or chief fiscal officer.

(e) An expenditure shall be made from such fund only by an

authorization of the supervising agency with the consent and approval of

the mayor and only for one or more of the following purposes:

(i) Payment of expenses of establishing and administering the fund;

(ii) Payment of a delinquent installment or installments of interest

and principal due to the municipality under a mortgage loan, temporary

loan or advance to a municipally-aided project;

(iii) Payment of any loss sustained by the municipality as a result of

the making of a loan, temporary loan or advance to a municipally-aided

project, whether such loss consists of a deficiency upon a mortgage,

foreclosure sale as authorized by sections thirty-four and ninety-four

of this chapter or otherwise; except that in the event the municipality

acquires title to the project, payment for any loss or deficiency shall

be deferred until such time when the municipality shall dispose of title

to the project; any such loss or deficiency shall be diminished by the

municipality to the extent of the amount derived by the municipality

from such disposition plus any net operating income derived by the

municipality during its period of ownership or less any net operating

loss sustained by the municipality during such period and less any

amount of interest paid by the municipality to retire any bonded

indebtedness incurred in connection with the loan made to such project.

(iv) Payment of all costs entailed in procuring mortgage insurance in

such amounts, and from such insurers as the supervising agency deems

desirable to insure the municipality against any loss resulting from the

making of a mortgage loan to a municipality-aided project.

The payment from such fund of any delinquent installment or

installments due the municipality under a mortgage as provided in

subsection (ii) of this paragraph e shall not be deemed either a

remission or waiver of the right to such installment or installments and

such installment or installments shall continue to be due and payable to

the municipality and shall be deposited, together with interest accrued,

in the mortgage insurance fund when paid.

(f) The comptroller or chief fiscal officer shall keep a separate

account for the mortgage insurance fund. Such account shall show:

(i) The date and amount of each sum paid into the fund;

(ii) The interest earned by the fund;

(iii) The capital gains or losses resulting from the sale of

investments of the fund;

(iv) The interest or capital gains which have accrued to the fund;

(v) The amount and date of each withdrawal from the fund;

(vi) The assets of the fund indicating the cash balance therein and a

schedule of the amounts invested.

The comptroller or chief fiscal officer shall render a detailed report

of the operation and condition of such fund to the supervising agency

annually each fiscal year and at such other times as the supervising

agency or the mayor may require.

8. Whenever reference is made in this article to a municipal loan, a

loan by a municipality, a loan from a municipality, a contract for a

loan between a municipality and a company, or any similar term, with

respect to the territorial limits of the city of New York such term

shall be construed to refer to a loan made or to be made either by such

municipality or by the New York city housing development corporation,

whichever is applicable.

9. The city of New York shall have the power to invest jointly or

participate in a loan with the New York city housing development

corporation or with one or more organizations or entities mentioned in

section fifteen in a bond or note and single participating mortgage, or

in separate bonds or notes and separate mortgages of a company organized

pursuant to the provisions of this article upon such terms and

conditions as are provided in said section fifteen of this article.

10. A municipality with a population of less than one million may, by

action of its local legislative body concurred in by the commissioner,

provide for the supervision and regulation of any municipally-aided

project and the company carrying out such project by the commissioner in

lieu of the supervising agency. With respect to any such project and

company, the commissioner shall have, from and after the effective date

of such action, all of the powers and duties of a supervising agency

pursuant to this article. The company shall pay to the commissioner

fees, as prescribed by the commissioner, to cover the expenses of

examination, audit, and supervision of the company and the project.

Notwithstanding any other provision of law, funds collected pursuant to

such fees shall be deposited to the credit of the general fund.

The provisions of subdivisions one and eight of this section shall

apply only to projects financed in whole or in part by a mortgage loan,

temporary loan or advance by a municipality. The provisions of

subdivisions two, three, four, five, six and seven hereof shall apply to

all municipally-aided projects including projects financed in whole or

in part by a mortgage loan from the federal government or any agency or

instrumentality thereof or by a mortgage or mortgage bonds insured by

the federal government or any agency or instrumentality thereof.

§ 23-a — Mortgage modifications, evidence of pre-existing indebtedness

Mortgage modifications, evidence of pre-existing indebtedness.

1. Notwithstanding the provision of any law, general or special, the

supervising agency shall have the power to:

(i) assign or pledge or contract to assign or pledge any mortgage

securing a loan, including any loan to finance the construction of a

project, and any note or bond evidencing indebtedness thereon, made by

the municipality in accordance with the provisions of this article, and

any contract or arrangement, including any subsidy contract or

arrangement, relating to such mortgage, and the receipts to be derived

from any of the foregoing, and may reacquire or accept and contract to

reacquire or accept any such mortgage, note, bond, contract or

arrangement, including any mortgage, note, bond, contract or arrangement

made in substitution thereof, and the receipts to be derived therefrom,

or

(ii) consent to and contract for the modification of any of the terms

of a mortgage, and note or bond secured thereby, made pursuant to

section twenty-three of this chapter for the purpose of obtaining

insurance of such mortgage loan by the federal government in order to

refinance all or any part of the indebtedness evidenced by such mortgage

and note or bond, or

(iii) satisfy such mortgage in order to enable the company to obtain

insurance by the federal government of a mortgage loan made for the

purpose of refinancing all or any part of the indebtedness evidenced by

such mortgage and note or bond.

2. In the event that the existing mortgage loan is satisfied pursuant

to this section, the supervising agency may in consideration of the

issuance of such satisfaction accept a new mortgage and note or bond

insured by the federal government in an amount equal to the maximum

principal amount of a mortgage loan the federal government will insure

or accept the proceeds available to the housing company as a result of

the refinancing.

3. In the event that there is residual indebtedness, the housing

company shall make and the supervising agency shall accept such

instruments evidencing such indebtedness as may be required by the

supervising agency as are consistent with the provisions of subdivision

fifteen of section twelve of this chapter, in such form and upon such

terms as the supervising agency may approve. In the event that there are

residual receipts obligations, the housing company may make and the

supervising agency may accept instruments evidencing such obligations in

accordance with the provisions of subdivision sixteen of section twelve

of this chapter.

4. Notwithstanding any other provisions of this article or any

general, special or local law, where the supervising agency has made the

findings required in subdivision one of section twenty-six or section

twenty-six-a and where a project has been approved pursuant to

subdivision five of section twenty-six of this chapter, the supervising

agency may make or contract to make a mortgage loan or exercise other

related powers pursuant to this section or section twenty-three-b or

subdivision twenty-two-a of section six hundred fifty-four of this

chapter without further findings by the supervising agency or further

approval by the local legislative body.

4-a. Notwithstanding the provisions of this article or any general,

special or local law to the contrary, where an existing mortgage loan is

modified or satisfied pursuant to this section and the supervising

agency has approved a new or modified mortgage or mortgages, including a

mortgage and note or bond insured by the federal government and a

mortgage to secure residual indebtedness, the supervising agency may

sell, assign, or otherwise dispose of, at public or private sale, on

such terms and conditions as shall be deemed appropriate by the

supervising agency subject to the approval of the comptroller or chief

fiscal officer of the municipality wherein such agency is located, such

new or modified mortgage or mortgages and related instruments.

4-b. Notwithstanding the provisions of this article or any general,

special or local law to the contrary, where an existing mortgage loan is

modified or satisfied pursuant to this section, the supervising agency

may pay or incur fees, costs, expenses and other amounts, whether or not

any amounts have been appropriated therefor in order to (1) meet a

municipality's obligations under an agreement with the federal

government on account of mortgage insurance, provided that a

municipality's share of any mortgage insurance claim paid by the federal

government shall not exceed fifty percent of the insurance benefits paid

by the federal government, and further provided that a municipality's

share of such claims under any contract or contracts entered into

between a municipality and the federal government shall not exceed five

percent of the outstanding principal amount of all mortgages of the

municipality at any time insured by the federal government and included

within such contract, (2) make loans for, or establish escrow accounts

for the issuance of mortgage insurance, (3) absorb discounts associated

with any sale, assignment or other disposition of a mortgage note or

bond insured by the federal government, (4) pay fees required by the

federal government as a condition for the issuance of mortgage

insurance, (5) install such life safety devices and satisfy such minimum

property standards, as may be required by the federal government which

devices or standards are in addition to any requirement imposed by the

municipality as mortgagee and to make loans for such purposes, (6) pay

closing and other costs related to obtaining mortgage insurance from the

federal government, (7) permit the municipality to issue obligations

secured by such mortgage or mortgages, (8) meet such other costs as the

federal government may from time to time impose, (9) pay any amounts not

previously advanced under a mortgage or mortgages modified or satisfied

pursuant to this section, and (10) hold an amount not to exceed twenty

million dollars at any one time in a revolving account for a period not

to exceed eighteen months from the time of the first deposit therein, to

pay fees, costs, expenses and other amounts attributable to making and

insuring mortgages pursuant to this section or attributable to issuing

obligations secured by such mortgages. If the municipality sells any

such mortgages insured by the federal government for an amount in excess

of the principal amount thereof at the time of such sale, or if the

municipality issues obligations secured by any such mortgages and the

yield on such mortgages is greater than the yield on such obligations

(the yield on such mortgages and obligations having been calculated in

accordance with section one hundred three of the internal revenue code

of the United States and regulations thereunder), then any such premium

and any such differential may be used by the municipality for any lawful

purpose, provided, however, that an amount equal to the annual sum of

such premium and such differential, to the extent such differential is

not paid to or for the benefit of the holders of such obligations, shall

be credited annually by the municipality, at such times as determined by

the supervising agency, as a payment by all municipally-aided projects

then having residual indebtedness, of the then accrued and unpaid

interest on such residual indebtedness. To the extent that any such

credit otherwise allocable to a project in any year exceeds unpaid

interest on the residual indebtedness of such project in that year, such

excess credit shall be allocated among all other eligible projects

having accrued and unpaid interest on residual indebtedness in that

year. Notwithstanding the provisions of the foregoing sentence of this

subdivision, if an eligible project has made cash payments in any year

for the sum of (i) interest on and principal of a federally insured

mortgage and (ii) interest on and principal of residual indebtedness and

(iii) all other payments on account of such insured mortgage, including

mortgage insurance premium and reserves, at least equal to the sum of

(i) interest and principal which would have been due annually on the

original mortgage loan for the project, at the interest rate in effect

at the time the project is refinanced, and (ii) all other required

annual payments on account of such original mortgage loan, such as

reserve requirements, then any excess credit allocable to such eligible

project shall be credited in the next succeeding year as a payment of

interest on residual indebtedness of such project before any cash

payment is required to be made for such interest. Subject to the

provisions of the preceding sentence of this subdivision, if the total

of such credit in any year available for all eligible projects exceeds

the total of all accrued and unpaid interest in that year on residual

indebtedness of all eligible projects then having residual indebtedness,

an amount equal to such excess credit shall be carried forward and

credited in future years as a payment of accrued and unpaid interest on

residual indebtedness of eligible projects in future years until such

time as no further interest remains unpaid with respect to any residual

indebtedness of eligible projects. The supervising agency shall divide

such credit among eligible projects on the basis of the respective

original principal amounts of the federally insured mortgages on

eligible projects; provided, however, that such credit shall be

allocated to projects which receive federal subsidies only to the extent

that such subsidies are not thereby reduced. When there is a

participation, new loan or investment pursuant to section twenty-three-b

of this article for which the consent of a company is required and which

will be substantially equivalent to a refinancing pursuant to section

twenty-three-a or subdivision twenty-two-a of section six hundred

fifty-four of this article, then for purposes of this subdivision the

interest of the municipality after such participation, new loan or

investment which is secured by a mortgage shall be deemed to be the

equivalent of residual indebtedness and the interest of entities or

organizations other than the municipality in such participation, new

loan or investment shall be deemed to be the equivalent of a federally

insured mortgage.

5. No company shall accept a mortgage loan to be insured by the

federal government made for the purpose of refinancing the existing

mortgage loan of a company which shall exceed the amount which can be

supported by the income derived from the operation of the project at the

rental rate determined by the supervising agency that would be necessary

to meet all necessary payments to be made by the company, of all

expenses including fixed charges, sinking funds, reserves and dividends

on outstanding stock, as authorized by the supervising agency, if the

principal amount of the original mortgage loan of the company were to be

fully repaid over the term of such mortgage loan by constant and equal

payments of principal and interest and if the interest rate on the

company's original mortgage loan was eight and one-half percent per

annum or, where the original mortgage loan provides for the payment of

interest at a maximum rate of less than eight and one-half percent per

annum, such maximum amount.

6. A company shall not accept a mortgage to be insured by the federal

government for the purpose of refinancing an existing mortgage loan of a

municipally-aided project unless the sum of interest and principal

payable in respect of such mortgage to be insured by the federal

government and in respect of any residual indebtedness, over the term of

such mortgage and residual indebtedness, shall be no more than the sum

of interest and principal that would be payable in respect of the

existing mortgage loan, over the term of such existing mortgage loan, at

an interest rate of eight and one-half percent per annum or where the

existing mortgage loan provides for a maximum interest rate of less than

eight and one-half percent, at such maximum interest rate.

7. The terms of any mortgage securing residual indebtedness of a

municipally-aided project shall include a provision to the effect that

so long as the project is subject to a mortgage insured or held by the

federal government (a) interest on and principal of such mortgage

securing residual indebtedness shall be payable only if and to the

extent to which surplus cash, as defined in a regulatory agreement

excecuted by the housing company and the federal government, is

available, and (b) the failure to pay interest and principal on such

mortgage securing residual indebtedness shall not constitute an event of

default unless surplus cash is available and not applied to such

payments of interest and principal.

8. Ten days before an initial application is filed with the federal

government to obtain insurance by the federal government of a mortgage

for the purpose of refinancing all or any part of a mortgage loan for a

municipally-aided project pursuant to section twenty-three-a or

subdivision twenty-two-a of section six hundred fifty-four of this

chapter, the supervising agency shall (a) mail to the president or other

representative of the tenants' association or cooperators' advisory

council, recognized by the supervising agency for such municipally-aided

project, written notice of the proposed refinancing, including a copy of

such initial application, and (b) make a copy of such initial

application available at its offices during business hours, for

inspection and copying by the residents of such municipally-aided

project. Ten days before the closing of a proposed participation, new

loan or investment with respect to a municipally-aided project pursuant

to section twenty-three-b of this article, the supervising agency shall

(a) mail to the president or other representative of the tenants'

association or cooperators' advisory council, recognized by the

supervising agency for such municipally-aided project, written notice of

such proposed participation, new loan or investment, including a summary

of the principal terms and conditions thereof, and (b) make a copy of

such summary available at its offices during business hours, for

inspection and copying by the residents of such municipally-aided

project. The unintentional failure of the supervising agency to comply

with the foregoing provisions of this subdivision shall not invalidate

or otherwise affect any such refinancing of a mortgage loan or any such

participation, new loan or investment.

§ 23-b — Participation in loan or investment

Participation in loan or investment. Notwithstanding any other

provisions of this article or of any general, special or local law,

where a municipality has made or contracted to make a mortgage loan to a

company to finance a project: one or more banking organizations as

defined in subdivision eleven of section two of the banking law,

educational institutions, hospitals, medical research institutes,

insurance companies, trustees or fiduciaries, including fiduciaries

holding funds for investment, the New York city housing development

corporation, other public corporations, or other entities which

purchase, invest, or deal in first mortgage loans in the normal course

of their business, or any combination of the foregoing, shall have the

power to participate in such loan or make or participate in a new loan

secured by a bond or note and a single participating mortgage, or by

separate bonds or notes and separate mortgages, or to invest, singly or

jointly, with the municipality in a bond or note and single

participating mortgage or in separate bonds or notes and mortgages or in

a new mortgage or mortgages with respect to all or a portion of the loan

by a municipality to a company; and the supervising agency shall have

the power, upon the mortgagor's consent, to modify the terms and

conditions of the original bond or bonds or note or notes and mortgage

or mortgages and any other documents executed in connection with such

original loan, as the supervising agency may deem necessary or desirable

to provide for such participation, new loan or investment as provided in

this section, including but not limited to (i) modification of the rate

and time of payment of interest on the original loan or rate and time of

amortization of principal thereof, (ii) providing for priority for

payment of the principal of and interest on that portion of the mortgage

indebtedness attributable to such participation, new loan or investment

by one or more of such entities or organizations, (iii) subordination of

the interest of the municipality to the interest of one or more of such

organizations or entities in such participation, new loan or investment,

and (iv) otherwise providing that the interest of each upon such

participation, new loan or investment need not be of equal priority as

to lien, or be equal as to interest rate, time or rate of amortization

of principal or time of payment of interest or otherwise; provided,

however, that the aggregate amount of the loan or loans to a company

does not exceed the amount authorized pursuant to section twenty-three

of this article. When consent of a company is required for any

participation, new loan or investment pursuant to this section and such

participation, new loan or investment will be substantially equivalent

to a refinancing of indebtedness pursuant to section twenty-three-a or

subdivision twenty-two-a of section six hundred fifty-four of this

chapter, then; (i) the provisions of this article, including without

limitation the provisions of section twenty-three-a, limiting total

indebtedness of a company after a refinancing shall apply to total

indebtedness of the company after such participation, new loan or

investment; (ii) the provisions of this article applicable to a mortgage

of a company insured by the federal government in connection with such

refinancing shall apply to a mortgage securing the interest of entities

or organizations other than the municipality in such participation, new

loan or investment; (iii) the provisions of this article concerning

residual indebtedness, such residual indebtedness having been calculated

as if the mortgage referred to in clause (ii) of this sentence were a

federally insured mortgage, shall apply to an interest of the

municipality after such participation, new loan or investment which is

secured by a mortgage; (iv) the provisions of this article concerning

residual receipts obligations shall apply to an interest of the

municipality after such participation, new loan or investment which is

unsecured, and (v) the provisions of subdivision four-b of section

twenty-three-a of this article concerning the credit referred to therein

shall apply in a manner consistent with such subdivision. For purposes

of the foregoing sentence of this section, the term surplus cash

(referred to in subdivision seven of section twenty-three-a of this

article) shall be applied by the supervising agency in a manner

consistent with the definition of such term in regulatory agreements

with the federal government for the refinancing of indebtedness of

municipally-aided projects. The provisions of subdivisions one and five

of section twenty-six of this article shall not apply to such

participation in a loan or investment pursuant to this section if

undertaken in connection with a project theretofore approved pursuant to

section twenty-six of this article. Where the municipality shall join

with one or more organizations of the kind hereinabove mentioned, in

making a loan secured by a single participating mortgage or by separate

mortgages, the municipality is authorized, through its supervising

agency, to make provision, either in the mortgage or mortgages or by

separate agreement, for the performance of such services as are

generally performed by a banking institution or insurance company which

itself owns and holds a mortgage or by a trustee under a trust mortgage.

The supervising agency is hereby authorized to act as trustee or to

consent to the appointment of a banking institution to act in such

capacity. In connection with any participation in a loan or investment

pursuant to this section, the municipality through its supervising

agency shall have the power to assign or pledge, in whole or in part, to

one or more of the organizations or entities participating in such loan

or investment its right, title and interest in and to any mortgage held

by it pursuant to this article and any contract or arrangement for the

payment of subsidy relating to such mortgage, including the right to

receive and apply to repayment of such loan and the interest thereon any

receipts to be derived by it from such mortgage or from such contract or

arrangement.

§ 23-c — Mortgage modifications

Mortgage modifications. 1. For the purposes of this section,

the following terms shall have the meanings set forth below:

(a) "Existing mortgage" shall mean any mortgage held by the

municipality securing a loan made by such municipality in accordance

with the provisions of this article, and any note or bond evidencing

indebtedness thereon, including, but not limited to, any mortgage, note

or bond securing residual indebtedness and any mortgage, note or bond

securing a loan to finance the construction of a project.

b. "Non-recoverable debt service" shall mean, with respect to any

increase in indebtedness executed or approved pursuant to this section

that is not attributable to project cost, all payments of interest and

principal on such portion of the indebtedness.

(c) "Restrictive agreement" shall mean a binding agreement between a

company and the supervising agency, which (i) prohibits the dissolution

of the company pursuant to the provisions of section thirty-five of this

article for not less than six years from the date of such agreement, and

(ii) prohibits the consideration of non-recoverable debt service in any

rent increase pursuant to the provisions of section thirty-one of this

article at any time subsequent to the date of such agreement.

2. Notwithstanding the provisions of this article or the provisions of

any law, general or special, a company that enters into a restrictive

agreement on or after the effective date of a chapter of the laws of

2004 which added this subdivision, may, with the approval of such

supervising agency:

(a) substitute a new mortgage approved by the supervising agency for

any existing mortgage;

(b) extend or modify any existing mortgage in such manner and for such

term as shall be determined by the supervising agency;

(c) subordinate any existing mortgage in any manner approved by the

supervising agency to the lien of any mortgage held by a lender that is

authorized to participate in loans pursuant to section twenty-three-b of

this article; and

(d) borrow funds and secure the repayment thereof by note and mortgage

or in any other manner approved by the supervising agency.

§ 24 — Income debentures

Income debentures. 1. With the approval of the supervising

agency or of the commissioner, as the case may be, the certificate of

incorporation, or an amended certificate may authorize the issuance of

income debentures bearing no greater interest than six per centum per

annum except as otherwise provided in this article. After the

incorporation of a company, the directors thereof may, with the consent

of two-thirds of the holders of the preferred stock issued and

outstanding offer to the stockholders of the company, the privilege of

exchanging their stock in such quantities and at such times as may be

approved by the supervising agency or the commissioner, as the case may

be, for such income debentures. In no event, shall the amount of stock

of the company be less than a per centum of the total of stock and

income debentures, to be fixed by the supervising agency or by the

commissioner, as the case may be.

2. Such income debentures and any instrument under which they are

issued may contain such other provisions, including provision for

amortization by serial maturities, through the operation of a sinking

fund or otherwise, as may be approved by the supervising agency or by

the commissioner, as the case may be.

§ 25 — Working capital

Working capital. The supervising agency or the commissioner, as

the case may be, may permit stock or income debentures to be issued for

working capital to be used in connection with such project to an amount

not exceeding three per centum of the estimated project cost or the

actual project cost, whichever is larger.

§ 26 — Conditions and security for loans

Conditions and security for loans. 1. No loan shall be made by

the state, the New York state housing finance agency, a municipality or

the New York city housing development corporation unless the

commissioner, with respect to a project aided by a state loan or New

York state housing finance agency loan, or the supervisory agency, with

respect to a municipally-aided project, finds that:

(a) The municipality has approved the project as provided in

subdivision five of this section and has enacted or will enact

regulations or appropriate restrictions adequately protecting the

project against future uses likely to depreciate unduly the value of

such project;

(b) The estimated revenues of the project will be sufficient to cover

all probable costs of operation and maintenance, of fixed charges and

operating reserves and depreciation reserves if any;

(c) The plans and specifications conform to the requirements of all

laws applicable thereto, and assure adequate light, air, sanitation and

fire protection;

(d) If the project is aided by a state loan, or a New York state

housing finance agency loan, the commissioner shall also find that the

project is in conformity with a plan or undertaking for providing low

rent housing facilities for persons of low income and for the clearance,

replanning, reconstruction or rehabilitation of a substandard and

insanitary area or areas, and for other facilities incidental or

appurtenant thereto as may be approved by the commissioner.

1-a. No company may be aided pursuant to this article by a mortgage

loan or tax exemption or both to finance the acquisition of a building

by residents thereof unless the commissioner or the supervising agency,

as the case may be, finds that:

(a) the condition of such building is deteriorating and the building

is located in a deteriorating area or in an area threatened with

deterioration by reason of economic, social or physical changes

occurring therein or in nearby areas;

(b) the building is not yielding sufficient revenues to cover costs of

operation and maintenance, of fixed charges and of reserves, if any, and

also a reasonable profit to the owner;

(c) the making of such loan will prevent further deterioration and

abandonment;

(d) at least two-thirds of the present residents consent to such

acquisition;

(e) financing for such acquisition is otherwise unavailable because of

the neighborhood, the age of the buildings, or other factors indicating

an inability of the private sector unaided to cause such acquisition to

be effected;

(f) the proceeds of such loan will not be used to refinance existing

debt in excess of a reasonable relationship to current value; and

(g) the term for repayment of such loan does not exceed the remaining

useful life of the building.

2. The principal of a loan made by the state shall be repaid by the

company over a period of not to exceed fifty years except in the case of

a loan to rehabilitate an existing building, in which case the period

shall not exceed thirty-five years, or the estimated life of the

project, whichever is shorter, in annual installments equal to the

amount payable by the state on the moneys borrowed for the project.

Such annual installment of principal need not be uniform in amount, but

may be so varied that the total payment of principal and interest shall

be approximately equal and constant during the period of the loan. Each

payment of principal and interest shall be made to the state comptroller

not later than five days before each payment by the state is required.

The loan shall bear the same rate of interest paid or to be paid by the

state for the definitive housing bonds issued on account of such loan.

The company shall pay to the state comptroller a proportionate share of

the cost of borrowing not later than thirty days after the state

comptroller has certified the amount of such share.

3. Any bonds or notes issued by the company and any mortgages relating

thereto may authorize the company, with the consent of the state

comptroller in the case of a state-aided project, or the supervising

agency in the case of a municipally-aided project, to prepay the

principal of the loan. Such bonds or notes and mortgages may contain

such other clauses and provisions as the commissioner in the case of a

state-aided project or the supervising agency in the case of a

municipally-aided project, shall require. Notwithstanding the provisions

of any general, special or local law, the principal of any loans made

pursuant to subdivision one of section fifteen of this article or the

principal of a loan made by a municipality pursuant to this article and

secured by a mortgage lien subordinate to the lien of a first mortgage

made pursuant to paragraph (b) of subdivision one of section fifteen of

this article may be amortized at such time or times or at such rate as

the supervising agency shall approve.

4. With respect to a state-aided project the commissioner may charge

the company reasonable fees for financing, regulation, supervision and

audit. Fees collected for such services shall be paid into and disbursed

from such fund or funds as may be provided by law.

5. (a) In a municipality where there is a planning commission, the

project shall first be submitted to it for approval. Where changes in

the city map and zoning amendments or variances are necessitated by such

project, such amendments, variances and changes shall be submitted

together with such project and considered as a part thereof. Such

planning commission, not later than ten weeks from the date of the

referral of the project to it, after a public hearing held on due

notice, notice of which shall be published at least ten days prior

thereto in the official publication of the municipality, or if none

exists, in a newspaper circulating in the municipality, shall submit its

report to the local legislative body certifying its unqualified

approval, its disapproval, or its qualified approval with

recommendations for modifications therein.

After public hearing held on due notice and after the report is

received or due from the planning commission, the local legislative body

may:

(i) if the planning commission shall have certified its unqualified

approval, approve the project by a majority vote;

(ii) if the planning commission shall have certified its disapproval

or shall have failed to make its report within ten weeks from the date

such project was submitted to it, nevertheless approve the project, but

only by a three-fourths vote;

(iii) if the planning commission shall have certified its qualified

approval together with recommendations for modifications, approve the

project together with the modifications recommended by the planning

commission by a majority vote, or approve the project without such

modifications but only by a three-fourths vote.

(b) In a municipality where there is no planning commission the

project shall be submitted to the local legislative body which, after

public hearing held on due notice, may either approve or disapprove the

project.

(c) Notwithstanding any other provision of law, changes in the city

map, zoning amendments, or variances contained in the plan shall be

deemed approved by the local legislative body when it approves the

project. Any such changes in the city map, zoning amendments, or

variances shall become effective on the date on which the supervising

agency shall file a resolution with the local legislative body in

implementation thereof.

6. The provisions of subdivisions one and five of this section shall

not apply to a state urban development corporation project or to any

loan made by the state or the state housing finance agency to such

project, notwithstanding anything to the contrary contained herein.

7. Notwithstanding anything to the contrary contained therein, the

provisions of subdivisions one and five of this section shall not apply

to a Battery Park city project or to any loan made by the state or the

New York state housing finance agency to such project.

§ 26-a — Findings for municipally-aided projects

Findings for municipally-aided projects.

No municipally-aided project aided solely by tax exemption shall be

approved by the supervising agency unless the agency shall have made the

findings set forth in subdivision one of section twenty-six.

§ 26-b — Special provisions with respect to state urban development corporation projects

Special provisions with respect to state urban development

corporation projects. 1. No loan shall be made by the state, the New

York state housing finance agency, or the state urban development

corporation for the acquisition, construction, reconstruction,

rehabilitation or improvement of a state urban development corporation

project, nor shall any such project be approved by the commissioner,

unless the commissioner finds that:

(a) the estimated revenues of the project will be sufficient to cover

all probable costs of all operations and maintenance, of fixed charges

and operating reserves and depreciation reserves, if any;

(b) the plans and specifications of the project assure adequate light,

air, sanitation and fire protection;

(c) the project is in conformity with a plan or undertaking for

providing low rent housing facilities for persons of low income and for

the clearance, replanning, reconstruction or rehabilitation of a

substandard and insanitary area or areas and for other facilities

incidental or appurtenant thereto as may be approved by the

commissioner.

2. Any state urban development corporation project shall comply with

the requirements of local laws, ordinances, codes, charters or

regulations applicable to the construction, reconstruction,

rehabilitation, alteration or improvement of such project, except where

the state urban development corporation, in its discretion, finds such

compliance not feasible or practicable, in which event such project

shall comply with the requirements of the state building construction

code, formulated by the state building code council pursuant to article

eighteen of the executive law, applicable to such construction,

reconstruction, rehabilitation, alteration or improvement. No county,

city, town or village shall have power to modify or change the drawings,

plans or specifications for the construction, reconstruction,

rehabilitation, or improvement of any such project or the construction,

plumbing, heating, lighting or other mechanical branch of work necessary

to complete the work in question, nor to require that any person, firm

or corporation employed on any such work shall perform any such work in

any other or different manner than that provided by such plans and

specifications, nor to require that any such person, firm or corporation

obtain any other or additional authority, approval, permit or

certificate from such county, city, town or village as a condition of

doing such work, nor shall any condition whatever be imposed by any such

county, city, town or village in relation to the work being done, and

the doing of any such work by any person, firm or corporation in

accordance with the terms of such drawings, plans, specifications or

contracts shall not subject said person, firm or corporation to any

liability or penalty, civil or criminal, other than as may be stated in

such contracts or incidental to the proper enforcement thereof; nor

shall any county, city, town or village have power to require that any

subsidiary of the New York state urban development corporation, or any

lessee therefrom or successor in interest thereto, obtain any other or

additional authority, approval, permit, certificate or certificate of

occupancy from such county, city, town or village as a condition of

owning, using, maintaining, operating or occupying any project acquired,

constructed, reconstructed, rehabilitated or improved by any such

subsidiary of the New York state urban development corporation.

3. Notwithstanding any other provision of this article, in the case of

a state urban development corporation project financed or to be financed

by a loan from the state urban development corporation, the corporation

shall exercise, with respect to such project and with respect to the

company carrying out such project, all of the powers and duties

exercised by the commissioner pursuant to this article with respect to

projects financed by the New York state housing finance agency until

such project, or any part thereof, is ready for initial occupancy as

determined by the commissioner, and thereafter, upon the issuance by the

commissioner of a certificate of assumption of supervision, such project

shall be subject to the supervision and control of the commissioner and

the New York state division of housing and community renewal, which

shall have the same powers and responsibilities with respect to such

project as they would have if such project were aided by a loan from the

state or the New York state housing finance agency under this article

and which shall assume the additional powers and responsibilities with

respect to such project theretofore conferred on the corporation by law

or contract. The corporation and the commissioner of housing and

community renewal shall take such actions and execute such documents as

may be necessary to implement this subdivision.

§ 26-c — Special provisions with respect to Battery Park city projects

Special provisions with respect to Battery Park city projects.

1. No loan shall be made by the state or the New York state housing

finance agency for the acquisition, construction, reconstruction,

rehabilitation or improvement of a Battery Park city project, nor shall

any such project be approved by the commissioner, unless the

commissioner finds that:

(a) the estimated revenues of the project will be sufficient to cover

all probable costs of all operations and maintenance, of fixed charges

and operating reserves and depreciation reserves, if any;

(b) the plans and specifications of the project assure adequate light,

air, sanitation and fire protection;

(c) the project is in conformity with a plan or undertaking for

providing low rent housing facilities for persons of low income.

2. Notwithstanding any other provisions of this article, in the case

of a Battery Park city project financed or to be financed by a loan from

Battery Park city authority, all approvals, findings and consents which

are required to be given or made by the commissioner pursuant to this

article shall be given or made instead by Battery Park city authority,

and the authority shall exercise, with respect to such project and with

respect to the company carrying out such project, all of the powers and

duties exercised by the commissioner pursuant to this article with

respect to projects financed by the New York state housing finance

agency.

§ 27 — Limitations

Limitations. No company shall:

1. Acquire any real property or interest therein unless it shall first

have obtained from the commissioner or the supervising agency, as the

case may be, a certificate that such acquisition is necessary or

convenient for the public purpose defined in this article.

2. Pay interest upon its income debentures at a rate higher than six

per centum per annum except as otherwise provided in this article.

3. Issue its stock, income debentures and bonds covering any project

in an amount greater in the aggregate than the actual project cost.

4. Without first having obtained the written consent of the

commissioner or the supervising agency, as the case may be:

(a) Construct, reconstruct, rehabilitate, improve or alter any

project, or enter into any contract therefor.

(b) Sell, transfer or assign any real property, except that no such

consent shall be necessary in any sale in foreclosure as herein

provided.

(c) Except as otherwise provided in this article, encumber, lease or

rent all or any part of its real property.

(d) Enter into contracts for the operation of the project.

(e) Make a guaranty of payment.

(f) Voluntarily dissolve.

(g) Enter into contracts for the payment of salaries to officers or

employees.

5. Pay interest on its mortgage indebtedness at a rate higher than six

per centum per annum, or at such higher rates as may be approved by the

commissioner, or the supervising agency, as the case may be, but in no

event shall any such rate exceed the rate of interest prescribed by the

superintendent of financial services pursuant to section fourteen-a of

the banking law or, in the case of a mortgage loan insured or held by

the federal government, the rate approved by the federal government;

provided, however, that in the case of a company carrying out a state

urban development corporation project or in the case of an instrument or

instruments securing the residual indebtedness of a company, which

indebtedness is secured by a mortgage on the real property of a project,

such rate shall not exceed the rate of interest prescribed by the

superintendent of financial services pursuant to section fourteen-a of

the banking law or nine per centum per annum, whichever is the higher;

and further provided, however, that, in the case of a company that is a

mortgagor under a mortgage assigned to or acquired by the New York city

housing development corporation pursuant to subdivision twenty-one of

section six hundred fifty-four of this chapter and whose project is

aided by a subsidy from the federal government, such rate shall be the

rate of interest approved by the supervising agency. Notwithstanding the

foregoing provisions of this section, the rate of interest that a

company shall have the power to pay on that portion of its mortgage

indebtedness attributable to an investment or participation in a loan

made pursuant to subdivision one of section fifteen by an organization

or entity mentioned in such subdivision, shall be the rate of interest

approved by the commissioner or the supervising agency, as the case may

be.

6. Notwithstanding the provisions of subdivision five of this section

twenty-seven, a company, which has obtained a mortgage loan from the New

York city housing development corporation or the New York state housing

finance agency and where it is necessary for additional bonds or notes

to be issued by the New York city housing development corporation or the

New York state housing finance agency (i) in order to obtain funds to

fulfill the mortgage loan commitment to such company, as such commitment

may be amended or (ii) to refund or renew notes issued in fulfillment

thereof, for a project partially or temporarily financed by bonds or

notes issued, in the case of the New York city housing development

corporation, prior to the first day of August, nineteen hundred

seventy-five, and in the case of the New York state housing finance

agency, prior to the thirty-first day of December, nineteen hundred

seventy-five , may pay interest on that portion of its mortgage

indebtedness, the funds for which were obtained by the New York city

housing development corporation or the New York state housing finance

agency through the issuance of such additional or refunding bonds or

notes, at a rate not in excess of the cost of financing incurred by the

New York city housing development corporation or the New York state

housing finance agency, as the case may be, to issue such additional or

refunding bonds or notes, provided that, with respect to the New York

city housing development corporation, such corporation determines that

such cost of financing is reasonable and the commissioner or the

supervising agency, as the case may be, shall approve such cost of

financing.

§ 28 — Payments from earnings

Payments from earnings. 1. There shall be paid annually out of

the earnings of the company, after providing for all taxes, assessments

and expenses, a sum for interest on and amortization of the mortgage

indebtedness of all mortgages of the company, depreciation charges and

reserves if, when and to the extent deemed necessary by the commissioner

or the supervising agency, as the case may be, plus a dividend of six

per centum on outstanding stock and interest not exceeding six per

centum on the outstanding income debentures of the company; the

obligation in respect of such payments shall be cumulative, and any

deficiency in interest, amortization, depreciation, reserves, if any,

and dividends in any year shall be paid either from any cash surplus

derived from earnings remaining in the treasury of the company in excess

of the amount necessary to provide such cumulative annual sums or from

the first available earnings in subsequent years. If, at the end of any

three year period, the gross receipts should exceed the payments or

charges necessary for the purposes of the project or projects and are

not needed for a sinking fund, reserves or other purposes, the balance

may be paid in further reduction of any indebtedness to the extent and

upon terms and conditions approved by the commissioner and the state

comptroller or by the supervising agency, as the case may be. A sinking

fund may be authorized by the commissioner or the supervising agency, to

purchase and retire bonds, income debentures or stock of the company at

a price approved by the commissioner or the supervising agency, as the

case may be, not exceeding par value thereof with accrued or unpaid

dividends or interest or if it be not practical to purchase such stock

or income debentures at a price so approved, the money in such sinking

fund may be added to the surplus of such company. Any stock or income

debentures purchased out of such sinking fund shall be cancelled and

shall not be reissued.

2. Anything contained in this article to the contrary notwithstanding,

a company which receives a loan from the state, the New York state

housing finance agency or a municipality after July first, nineteen

hundred sixty-nine, or a mutual company which has been duly authorized

to issue income debentures to finance the modernization or replacement

of project improvements or the acquisition and installation of energy

saving equipment and which is otherwise authorized to pay dividends upon

its shares or interest upon its income debentures, may, with the

approval of the commissioner or the supervising agency as the case may

be, pay such dividends or interest in excess of six per centum per

annum, but in no event shall any such rate exceed the interest rate

prescribed by the superintendent of financial services pursuant to

section fourteen-a of the banking law, provided, however, if the voting

stock of a mutual company has not been issued and delivered to the stock

subscribers, then the additional authorization of such stock subscribers

is required to be obtained by a majority vote.

3. No director or officer of a company shall receive, directly or

indirectly, any salary, compensation or emolument from such company, as

such director or officer or in any other capacity, unless authorized by

the commissioner or the supervising agency, as the case may be.

§ 29 — Acquisition of property

Acquisition of property.

(a) After a project, other than a state urban development corporation

project, has been been approved by the commissioner or the supervising

agency and the local legislative body, the commissioner or the

supervising agency as the case may be, shall issue a certificate

declaring that the acquisition of the property is necessary for the

public purpose defined in this article and the company may acquire the

property needed for the project or the municipality may, with respect to

a municipally-aided project or a project aided either by a state loan or

a loan from the New York state housing finance agency, take property by

condemnation for the company, pursuant to the provisions of article nine

of this chapter.

(b) after a state urban development corporation project has been

approved by the commissioner, the commissioner shall authorize the

company undertaking the project to acquire the property needed for such

project.

(c) Notwithstanding the provisions of subdivision (a) of this section,

in the case of a Battery Park city project financed or to be financed by

a loan from Battery Park city authority, the approval of the project and

the certificate declaring that the acquisition of the property is

necessary for the public purposes defined in this article shall be

issued by Battery Park city authority.

§ 30 — Transfer of real property

Transfer of real property. 1. Notwithstanding any requirement of

law to the contrary, every executor, administrator, trustee, guardian or

other person, holding trust funds or acting in a fiduciary capacity,

unless the instrument under which such fiduciary is acting expressly

forbids, the state, its subdivisions, municipalities, all other public

bodies, all public officers, persons, partnerships and corporations

organized under and governed as to investments by or pursuant to the

provisions of the banking law or organized under or subject to the

provisions of the insurance law, the superintendent of financial

services as conservator, liquidator or rehabilitator of any such person,

partnership or corporation, owning or holding any real property may

grant, sell, lease or otherwise transfer any such real property to a

company and receive and hold any cash, stock, bonds, notes, mortgages,

or other securities or obligations, secured or unsecured, exchanged

therefor by such company and may execute such instruments and do such

acts as may be deemed necessary or desirable by them or it and by the

company in connection with a project or projects. Notwithstanding the

provisions of any general, special or local law, charter or ordinance,

such grant, sale, lease or transfer may be made without public auction

or bidding.

2. Any banking institution, foundation, labor union, employers'

association, veterans' organization or insurance company, or any group

thereof, which has undertaken a project through direct ownership or

lease may transfer to the project any real property which it owns or

holds within an area. The market value of such property, as approved by

the commissioner or the supervising agency, as the case may be, shall be

included in the estimated or actual project cost.

3. Notwithstanding the provisions of any general, special or local

law, charter or ordinance, the local legislative body of a city having a

population of one million or more may, upon the request of or with the

approval of the board of education of such city's school district,

grant, sell, lease or otherwise transfer any lands or rights or

interests therein or thereto, including fee interest, easements, space

rights or air rights or other rights or interests owned by such city and

occupied or reserved for school purposes and needed therefor, to a

company where necessary for the joint development of a project and a

school or appurtenant facilities without public auction or bidding,

provided that no such sale, lease or transfer of lands or rights therein

or thereto is authorized where the development of a project contemplates

the erection of housing facilities over an existing school or

playground. The term of any such lease shall not be limited by any

provision of any general, special or local law or charter applicable to

such city limiting the period of time during which a lease or any

renewal thereof may run.

§ 31 — Rentals and selection of tenants

Rentals and selection of tenants. 1. (a) A company may, with the

approval of the commissioner or the supervising agency, as the case may

be, fix maximum rentals per room to be charged tenants of the dwellings,

the average of the rentals for the dwellings in any project not to

exceed the maximum average rentals determined by the commissioner or the

supervising agency, as the case may be, before any commitments are made

by the company for the construction of the project. The commissioner or

the supervising agency, upon his or its own motion, or upon application

by the company or of a stockholder, lienholder, a creditor, or of

holders of at least ten per centum of the bonds of the company, or by

the federal government where the mortgage loan of the company is insured

or held by the federal government, may vary such rental rate from time

to time so as to secure, together with all other income of the company,

sufficient income for it to meet within reasonable limits all necessary

payments to be made or projected to be made during the term of a lease

by the said company, of all expenses including fixed charges, sinking

funds, reserves and dividends on outstanding stock as authorized by the

commissioner or the supervising agency, as the case may be. Letting,

subletting or assignment of leases of apartments at greater rentals than

those approved by the commissioner or the supervising agency shall be

unlawful. Where the mortgage loan of a company is insured or held by the

federal government or where a project is owned by the federal

government, rental rates shall be varied without regard to the

provisions of any general, special or local law which would otherwise

limit or control such rental rates or the determination or variation

thereof for so long as such mortgage loan remains outstanding or the

project financed by such a mortgage loan is owned by the federal

government. No variation of a rental rate in a project financed by a

mortgage loan insured or held by, or owned by the federal government

shall be effective unless approved by the federal government.

(b) Unless any applicable regulation of or regulatory agreement with

the federal government shall otherwise provide, (i) the tenants in a

project financed by a mortgage loan insured or held by the federal

government shall be entitled and may elect to enter in a lease for a

term of up to three years at such rental rates as may be established by

the commissioner or the supervising agency, as the case may be, pursuant

to paragraph (a) of subdivision one of this section, (ii) the rental

rates to be charged under any such lease shall be established after

consideration of the term of such lease and may differ from the rental

rates to be charged under any other lease of a different term and (iii)

the commissioner or the supervising agency, as the case may be, shall in

establishing such rental rates consider the obligations of the company

under any instruments evidencing or securing any residual indebtedness.

Such leases shall contain a provision authorizing the variation of the

rental rates during the term of such leases upon an application made by

the federal government pursuant to paragraph (a) of subdivision one of

this section.

* (c) A company may, with the approval of the commissioner or the

supervising agency, as the case may be, fix maximum charges to be paid

by each occupant for the non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons, which charges may include payment for board and such other

services as may be provided as an incident to occupancy, the average of

such charges for all the non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons in any project not to exceed the maximum average charges for all

such non-housekeeping accommodations, aged care accommodations or

non-housekeeping accommodations for handicapped persons determined by

the commissioner or the supervising agency as the case may be, before

any commitments are made by the company for the construction of the

project. The commissioner or the supervising agency upon his or its own

motion, or upon application by the company or of a stockholder, lien

holder, a creditor or of holders of at least ten (10%) per centum of the

bonds of the company, may vary such charges from time to time so as to

secure, together with all other income of the company, sufficient income

for it to meet within reasonable limits all necessary payments to be

made by said company, of all expenses including fixed charges, sinking

funds, reserves and dividends on outstanding stock as authorized by the

commissioner or supervising agency as the case may be. It shall be

unlawful to make non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons available at greater charges than those approved by the

commissioner or the supervising agency.

* NB There are 2 (c)'s

* (c) Disclosure of bases. The commissioner, administrator or

supervising agency, as the case may be, shall make available for

inspection and copying by the residents in any affected development, all

items and data and recommendations utilized as the various bases for the

decision on increases in rental or carrying charges, upon notification

of the decision to the applicant of the action taken.

* NB There are 2 (c)'s

2. (a) The dwelling or non-housekeeping accommodations without board

in a company project shall be available for persons or families of low

income whose probable aggregate annual income at the time of admission

and during the period of occupancy does not exceed, the greater of (i)

the median income for such persons or families for the metropolitan

statistical area in which the project is located, or if a project is

located outside a metropolitan statistical area, the median income for

such persons or families for the county in which the project is located,

as most recently determined by the United States department of housing

and urban development, in which case any person or family becoming

eligible for admission pursuant to this subparagraph shall pay, from the

time of admission, a rental surcharge as provided for in subdivision

three of this section, computed on the basis of the income limitations

applicable to such persons or families in the absence of this

subparagraph, or (ii) eight times the rental, including the value or

cost to them of heat, light, water and cooking fuel, of the dwellings

that may be furnished to such persons or families, except that in the

case of families with three or more dependents, such ratio shall not

exceed nine to one. Persons or families with two or less dependents

eligible for admission or continued occupancy pursuant to subparagraph

(ii) of this paragraph or subparagraph (ii) of this paragraph prior to

the effective date of a chapter of the laws of two thousand nineteen

that amended subparagraph (ii) of this paragraph, shall pay a rental

surcharge computed on the basis of an income limitation of seven times

the rental and families with three or more dependents eligible for

admission or continued occupancy pursuant to subparagraph (ii) of this

paragraph or subparagraph (ii) of this paragraph prior to the effective

date of a chapter of the laws of two thousand nineteen that amended

subparagraph (ii) of this paragraph, shall pay a rental surcharge

computed on the basis of an income limitation of eight times the cost of

the rental, including in each instance the value or cost to the persons

or families of heat, light, water and cooking fuel, of the dwellings

furnished to such persons or families.

The "probable aggregate annual income" in the case of dwelling

accommodations means the annual income of the chief wage earner of the

family, plus all other income of other members of the family over the

age of twenty-one years, plus a proportion of income of gainfully

employed members under the age of twenty-one years, the proportion to be

determined by the company as approved by the commissioner or the

supervising agency, as the case may be, excluding therefrom a deduction

of fifteen thousand dollars from the income of secondary wage earners of

the family or a larger deduction if approved by the commissioner or the

supervising agency, as the case may be, except that the company, as

approved by the commissioner or the supervising agency, as the case may

be, may exclude a proportion of the income of other members of the

family over the age of twenty-one years for the purpose of determining

eligibility for admission or continued occupancy, or for establishing

the rental of such family, or for all such purposes; in the case of such

non-housekeeping accommodations it means the annual income of the

occupant, provided that the commissioner or supervising agency, as the

case may be, may make rules and regulations relative to the allocation

of the income of a family among the members thereof for the purpose of

determining the income attributable to such occupant.

(b) For the purpose of determining maximum income to establish

eligibility for admission or continued occupancy of, or the imposition

of surcharges upon, tenant-cooperators in a mutual company project, or

for all such purposes, there may be added to the total annual carrying

charges an amount equal to six per centum of the investment of a person

or family in the equity obligations of such housing company and, where

not included in the carrying charges payable to such company, the value

or cost to them of heat, light, water and cooking fuel and, to the

extent authorized by the commissioner or the supervising agency as the

case may be, the value or cost to them of repainting and replacement of

fixtures and appliances.

(c) The non-housekeeping accommodations with board in a company

project including non-housekeeping accommodations with board designed

for the occupancy of handicapped persons shall be available for persons

of low income whose probable aggregate annual income at the time of

admission and during the period of occupancy does not exceed four times

the annual charges to be paid by such persons and in the case of aged

care accommodations two times the annual charges to be paid by such

persons. The "probable aggregate annual income" means the annual income

of the person occupying such non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons, provided that the commissioner or supervising agency, as the

case may be, may make rules and regulations relating to the allocation

of the income of a family among the members thereof for the purpose of

determining the income attributable to such occupant.

(d) A company may, with the approval of the commissioner or the

supervising agency, as the case may be, lease dwellings in a project to

an authority, at rentals fixed for such dwellings pursuant to the

provisions of subdivision one of this section less an appropriate

adjustment for the increased tax exemption, if any, attributable to such

dwellings pursuant to subdivision three of section thirty-three of this

chapter, for occupancy by persons and families of low income who are

eligible and pay rents therefor pursuant to the provisions of the public

housing law.

(e) Notwithstanding the provisions of this subdivision, families whose

probable aggregate annual income does not exceed one hundred twenty-five

percent of the limitations as to income as determined pursuant to

paragraphs (a) and (b) of this subdivision, shall also be eligible for

admission to the dwelling or non-housekeeping accommodations without

board of a project on the understanding that any family becoming

eligible for admission by reason hereof shall pay, from the time of

admission, a rental surcharge as provided for in subdivision three of

this section, computed on the basis of the income limitations applicable

to such family in the absence of this subdivision. In applying the

provisions of subdivision three of this section to a family becoming

eligible by reason of this section, the maximum income prescribed by law

for admission or occupancy shall for all purposes be computed without

reference to this paragraph.

2-a. Notwithstanding any other provision of law, the commissioner or

supervising agency shall authorize and make provision in rules and

regulations for an immediate downward adjustment in surcharge upon a

showing of substantial decrease in income caused by events including,

but not limited to death, disability or illness.

3. In the event that the income of a person or family in occupancy

should increase and exceed the maximum prescribed by law for admission

or for continued occupancy, based on the latest existing rent, by more

than twenty-five per centum, such person or family shall be subject to

removal from the dwelling, non-housekeeping, aged care accommodations or

non-housekeeping accommodations for handicapped persons provided,

however, that such person or family may be permitted to remain in

occupancy until such income exceeds the maximum prescribed by law by

more than fifty per centum, if the company, with the approval of the

commissioner or the supervising agency, shall determine that removal

would cause hardship to such person or family. Any person or family in

occupancy whose income exceeds the maximum prescribed by law shall pay a

rental surcharge in accordance with a schedule of surcharges to be

promulgated by the company with the approval of the commissioner or the

supervising agency, as the case may be, provided, however, such rental

surcharge shall in no event exceed fifty per centum of the existing

rent.

4. Twenty-five per cent of rental surcharges collected pursuant to

this section on account of rentals payable prior to July first, nineteen

hundred eighty-one shall be paid by the company to the municipality

which has granted tax exemption pursuant to section thirty-three of this

article as a credit against the grant of tax exemption, the value of

such tax exemption and of such credit to be determined on an individual

dwelling, non-housekeeping, aged care accommodation or non-housekeeping

accommodations for handicapped persons unit basis. In the event that

such tax exemption has not been granted, or in the event that a sum

equal to the total of all accrued taxes as to individual dwelling,

non-housekeeping, aged care accommodation or non-housekeeping

accommodations for handicapped persons units where such tax exemption

was granted have been paid to the municipality, the excess if any, of

surcharges and all surcharges imposed after June thirtieth, nineteen

hundred eighty-one shall be applied to the expenses of operation and

management as approved by the commissioner or the supervising agency.

5. Notwithstanding the provisions of this section or of any other

general, special or local law, persons or families living in a project

under a lease for ninety-nine years renewable, or in perpetuity, or by

reason of ownership of stock in such company may, with the approval of

the commissioner or of the supervising agency, as the case may be, be

permitted to remain in occupancy for not more than three years after

such increase in income exceeds the maximum prescribed by law by more

than fifty per centum unless such occupancy is extended with the

approval of the commissioner or of the supervising agency, as the case

may be. Any such occupant required to remove from the project because of

excessive income as herein provided shall be discharged from liability

on any note, bond or other evidence of indebtedness relating thereto and

shall be reimbursed for all sums paid by such occupant to the company on

account of the purchase of stock or income debentures as a condition of

such occupancy.

6. Preference in admission to a project shall be given to families

displaced by a limited-profit housing project.

7. Preference in admission to a project with an open waiting list, as

determined by the commissioner or the supervising agency, shall be given

by a mutual company or an urban rental company or by the New York state

housing finance agency when subleasing dwellings in projects of such

companies pursuant to section forty-four-a of this chapter, to persons

or surviving spouses of persons who are veterans as such term is defined

pursuant to section eighty-five of the civil service law. The number of

persons given preference as a veteran or a surviving spouse of a veteran

shall be published adjacent to the application to be on such waiting

list. For projects with a closed list, as determined by the commissioner

or the supervising agency, such preference shall be given upon the

opening of the waiting list. Notwithstanding the foregoing, persons who

are residing in a limited-profit housing project shall be given first

priority for an internal transfer in the project in which they are

residing in accordance with rules and regulations promulgated by the

commissioner or the supervising agency.

7-b. Preference in admission to projects located in a city with a

population of one hundred thousand or more shall be given to members of

a police force of such city, provided such members otherwise qualify for

admission and provided, further, that such city has adopted a local law

authorizing such program.

8. Preference in admission to any project or to such portion of any

project which has been specifically designed for occupancy by aged or

handicapped persons, as the case may be, shall be given to such persons.

8-a. A company may rent one or more dwelling units to a social

services official or duly authorized agency, as defined in section three

hundred seventy-one of the social services law, for the operation of

agency boarding homes or group homes or to any public agency as defined

in section four hundred sixty-one of the general municipal law which

provides residences and social services to dependent aged persons.

9. (a) For the purpose of enabling lower income elderly persons to

continue in occupancy without paying rentals in excess of a fair

proportion of their income, any municipality having a population of less

than one million is authorized to make and to contract to make periodic

payments to a company in an amount not exceeding the difference between

the rent or carrying charges for the dwellings occupied by such lower

income persons and one-third of their net probable aggregate annual

income, where such rent or carrying charges exceed such one-third of

income; provided that the aggregate amount of periodic payments to be

made in accordance with contracts entered into by the municipality

during any fiscal year thereof pursuant to this subdivision, subdivision

seven of section eighty-five-a, section one hundred twenty-six and

section five hundred seventy-seven-a of this chapter shall not exceed

the aggregate amount of all real property taxes paid or payable during

such fiscal year by all companies organized pursuant to this article,

article IV, article V, and article XI of this chapter and the aggregate

estimated receipts of all such companies in such fiscal year from rental

surcharges collected or to be collected pursuant to this chapter.

(b) Such payments shall be made only on account of a person or family

in occupancy where the head of the household is sixty-two years of age

or older and is not a recipient of public assistance pursuant to the

social services law, and where the net probable aggregate annual income

of the person or family in occupancy does not exceed six thousand five

hundred dollars a year. Notwithstanding the provisions of subdivision

twenty-nine of section two of this chapter, net probable aggregate

annual income as used in this subdivision shall mean annual income of

family members from all sources after deduction of federal, state and

city income taxes; provided that any municipality may provide that

increases in benefits under the social security act which take effect

after such person or family has assumed occupancy shall not be taken

into account.

(c) A company having a contract with the municipality pursuant to this

subdivision may not collect from persons or families in occupancy on

whose account such payments are made any rentals in excess of the

amounts specified in such contract.

10. A housing company shall accept federal reimbursement under section

eight of the Housing and Community Development Act of 1974 in lieu of

such amount in rent payment for a person qualifying under such act and

residing in a project of such company. A housing company shall not

reject an applicant for an apartment solely on the basis that all or

part of the rent shall be paid under section eight of the Housing and

Community Development Act of 1974.

11. Every company subject to the provisions of this article shall on a

form prescribed by the commissioner or supervising agency annually

certify to such commissioner or supervising agency that all necessary

steps are being undertaken to ensure that all surcharges due pursuant to

this section are being properly billed, collected and remitted.

12. All municipally-aided projects shall post the first and last names

of all persons on each waiting list maintained by such project, in

chronological order, by such project's management office, or, if there

is no management office on the site of such municipally-aided project,

in such project's lobby.

13. The commissioner or supervising agency shall develop a written

procedure with regard to how applications for admission to a company are

processed and numbered, and how tenants are selected. Such procedure

shall be implemented and followed by all limited-profit housing

companies subject to the provisions of this article; provided, however,

that any limited-profit housing company may elect additional procedures

so long as such procedures are not inconsistent with the procedures

developed by the commissioner or supervising agency and any other

requirements set forth in this article.

14. The commissioner or supervising agency shall develop a procedure

whereby applicants are notified in the case that their application is

rejected by a limited-profit housing company subject to the provisions

of this article, and such procedure shall also include the appeal's

process available to the rejected applicant. The notification that shall

be sent to the applicant shall be in written form, include reasons why

the applicant was rejected, the appeal's process, and be sent to the

applicant within sixty days after the limited-profit housing company

decided to reject such applicant. Any limited-profit housing company may

elect additional procedures so long as such procedures are not

inconsistent with the procedures developed by the commissioner or

supervising agency and any other requirements set forth in this article.

For purposes of this subdivision, an applicant shall not be deemed

rejected if their application is still active on the limited-profit

housing company's waiting list and such waiting list is still open and

accepting applications.

15. The commissioner or the supervising agency shall develop and

require the use of a publicly available electronic automated system for

limited-profit housing companies to store, process, and maintain

applications and waiting lists. Waiting lists maintained by each such

company shall use a method that protects any personally identifiable

information of applicants from being publicly disclosed or accessible to

the public. Such electronic automated system shall also include general

information about each company, including, but not limited to: the name

and address of the company; the management office and address; the

number and size of all units in each building; and information on the

status of each waiting list, including whether the limited-profit

housing company is currently accepting applications and how long

applicants may have to wait.

§ 31-a — Resale price of shares

Resale price of shares. Notwithstanding any other provision of

this article and subject to any regulation not inconsistent with this

section which may be promulgated by the commissioner or supervising

agency:

(a) The resale price of shares in a mutual company shall be fixed by

the mutual company, subject to the approval of the commissioner or

supervising agency and shall be equal to (1) the consideration the

selling tenant-cooperator paid for such shares and (2) any capital

assessments and voluntary capital contributions approved by the

commissioner or supervising agency and paid by the selling

tenant-cooperator to the mutual company, to the extent not already

included in the consideration paid for such shares, and, if established

by the mutual company, (3) a proportionate share of the actual aggregate

amortization paid on all existing and prior mortgages on the project in

reduction of total outstanding principal indebtedness during such period

as shall be fixed by the board of directors of the mutual company, to

the extent not already included in the consideration paid for such

shares, and (4) reasonable administrative charges.

(b) The aggregate amount to be paid to the selling tenant-cooperator

with respect to the sale of the selling tenant-cooperator's shares shall

be fixed by the board of directors of the mutual company, subject to the

approval of the commissioner or supervising agency, and shall be equal

to (1) the consideration the selling tenant-cooperator paid for such

shares, (2) any capital assessments and voluntary capital contributions

approved by the commissioner or supervising agency and paid by the

selling tenant-cooperator to the mutual company, to the extent not

already included in the consideration paid for such shares, and (3) a

proportionate share of the actual aggregate amortization paid by the

selling tenant-cooperator on all existing and prior mortgages on the

project in reduction of total outstanding principal indebtedness during

such period as shall be fixed by the board of directors pursuant to

subdivision (a) of this section, to the extent not already included in

the consideration paid for such shares. To the extent that a selling

tenant-cooperator may be entitled to an amount less than the resale

price of his shares, the difference shall be retained by the mutual

company.

(c) The board of directors may, subject to the approval of the

commissioner or supervising agency, establish a general policy pursuant

to which a selling tenant-cooperator who had occupied more than one

dwelling unit is paid an amount measured by his proportionate share of

the actual aggregate amortization paid during his period of occupancy on

all existing or prior mortgages on the project. To the extent that a

selling tenant-cooperator may be entitled to an amount greater than the

resale price of shares, the difference may be paid to the selling

tenant-cooperator by the mutual company.

(d) The "proportionate share of the actual aggregate amortization paid

on all existing and prior mortgages on the project" referred to in

subdivision (a) of this section shall be in the same ratio to such

actual aggregate amortization as the number of shares held by the

selling tenant-cooperator at the time of sale bears to the total number

of shares of issued and outstanding capital stock of the mutual company

during such period.

(e) Nothing contained in this section shall prohibit the continued use

of any method of calculating resale price adopted by a mutual company

and approved by the commissioner or supervising agency prior to the

effective date of this section.

(f) a mutual company shall provide, upon request of a

tenant-cooperator, a written statement providing the current value of

such tenant-cooperator's shares and equity in such mutual company;

§ 31-b — Assignment or pledge of tenant cooperator's shares

Assignment or pledge of tenant cooperator's shares.

Notwithstanding any other provision of law, a tenant cooperator's shares

in a mutual company may be assigned or pledged as collateral for the

purpose of securing a loan for the purchase of such shares. The

commissioner or supervising agency, as the case may be, shall promulgate

regulations which provide that in the event of a default of such loan,

such shares may be resold, and the dwelling accommodations represented

by such shares may be occupied, only in accordance with the provisions

of this article.

§ 31-c — Tenant-cooperators; application of shares

Tenant-cooperators; application of shares. 1. No mutual

company shall require a current tenant-cooperator to use cash, loan or

mortgage to make an initial payment for shares that would entitle the

tenant-cooperator to occupancy upon transfer to another dwelling unit

within the mutual company's facilities, but instead, subject to

subdivision two of this section, shall first allow the tenant-cooperator

the option to apply the value of his or her shares and equity in the

mutual company toward any consideration required to be paid for such

shares.

2. Within one hundred eighty days of the effective date of this

section, the commissioner and the supervising agency, as the case may

be, shall each promulgate regulations authorizing a current

tenant-cooperator, entitled to occupancy by reason of ownership of

shares in such mutual company, to apply all or a portion of the value of

his or her shares and equity in the mutual company toward any

consideration required to be paid for shares which would entitle the

tenant-cooperator to occupancy of another unit owned and operated by the

mutual company, regardless of the sale of the tenant-cooperator's

current shares in such mutual company, but subject to such other charges

due and owing to the mutual company for which such tenant-cooperator may

be liable. Any dispute thereof may be determined by a court of

appropriate jurisdiction and any requirement to waive such right as a

condition of ownership or transfer shall be void as against public

policy.

§ 32 — Supervision and regulation

Supervision and regulation. The commissioner or the supervising

agency as the case may be, may:

1. Examine a company and keep informed as to its general condition,

its capitalization and the manner in which its property is constructed,

acquired, rehabilitated, leased, operated or managed, and to its

compliance with all provisions of law and orders of the commissioner or

the supervising agency.

2. Require every company to file with him or it an annual report

setting forth such information as the commissioner or the supervising

agency may require, verified by the oath of any officer, general manager

or other person in control of the company. Such report shall be in a

form, cover a period, and be filed at a time as prescribed by the

commissioner or the supervising agency.

3. From time to time make, amend and repeal supplementary rules and

regulations for carrying into effect the provisions of this article

provided, however, that such supplementary rules and regulations shall

be strictly limited in their application to the means and methods of

compliance with the provisions of this article to which such power

relates.

4. Make such agreements with bondholders, mortgagees or creditors of a

company to do or refrain from doing any act, not inconsistent with law,

to protect the investment rights of the state of New York, the New York

state housing finance agency, the New York city housing development

corporation or of the municipality.

5 (a) Administer oaths, take affidavits, hear testimony and take proof

under oath at public or private hearings; (b) subpoena and require the

attendance of witnesses and the production of books and papers

pertaining to any investigations and inquiries authorized by this

article and examine them in relation to any matter concerning which the

power to investigate is granted; (c) issue commissions for the

examination of witnesses who are out of the state or unable to attend or

are excused from attendance; (d) investigate into the affairs of a

company and into the dealings, transactions or relationships of such

company with third persons and into the affairs of any person, firm,

corporation or other entity having a financial interest, whether direct

or indirect, in the design, construction, acquisition, reconstruction,

rehabilitation, improvement, financing or operation of any project

undertaken by a company; (e) intervene, as a matter of right, in any

action or proceeding of which notice shall be given affecting the

project of a company; (f) take such steps in such action or proceeding

as may be necessary to protect the public interest.

With regard to duties and liabilities arising out of this article the

state, the commissioner or the supervising agency may be sued in the

same manner as a private person. No costs shall be awarded against the

commissioner, the state, or the supervising agency, as the case may be,

in any such litigation.

6. In the event of a violation by a company of a provision of the

certificate of incorporation or of law or of the loan or mortgage

contract or of any rules and regulations duly promulgated pursuant to

the provisions of this article, the commissioner or the supervising

agency, as the case may be, may remove any or all of the existing

directors of the company and appoint such person or persons who the

commissioner or the supervising agency, as the case may be, in his or

its sole discretion deems advisable, including officers or employees of

the division of housing and community renewal or the supervising agency,

as new directors to serve in the places of those removed. Directors so

appointed need not be shareholders or meet other qualifications which

may be prescribed by the certificate of incorporation or by-laws. In the

absence of fraud or bad faith, directors so appointed shall not be

personally liable for debts, obligations or liabilities of the

corporation. Directors so appointed shall serve only for a period

coexistent with the duration of such violation or until the commissioner

or the supervising agency, as the case may be, is assured in a manner

satisfactory to him or it against violations of a similar nature.

Officers or employees of the division of housing and community renewal

or of the supervising agency who are so appointed as directors shall

serve in such capacity without compensation. No such removal may take

place without written notice and an opportunity for the affected

directors to appear and be heard before the agency or commissioner with

respect to any alleged violation and the respective parties may be

represented by counsel. Notwithstanding any inconsistent provision of

any general, special or local law or any limitation contained in the

provisions of any city charter, the state or a municipality acting by

and through the commissioner or the supervising agency, as the case may

be, shall save harmless and indemnify any officer or employee of the

division of housing and community renewal or the supervising agency so

appointed as a director, from financial loss arising out of any claim,

demand, suit or judgment by reason of alleged negligence or other act by

such director, provided that such director was acting in the discharge

of his duties and within the scope of his employment and that such loss

did not result from the willful and wrongful act or gross negligence of

such director and provided further that this save harmless and

indemnification provision shall not in any way impair, limit or modify

the rights and obligations of any insurer under any policy of insurance

and shall inure only to directors so appointed and shall not enlarge or

diminish the rights of any other party. No action or special proceeding

based on or arising out of alleged negligence or other act by such

director may be commenced against such director, municipality or the

state unless a notice of claim shall have first been served in a manner

consistent with service upon a municipality or the state, as the case

may be.

7. Whenever the commissioner, in the case of a company undertaking or

otherwise operating a state-aided project, or the supervising agency, in

the case of a company undertaking or otherwise operating a

municipally-aided project, shall be of the opinion that such company is

failing or omitting, or is about to fail or omit to do anything required

of it by law or by order of the commissioner or is doing or is about to

do anything, or permitting anything, or is about to permit anything to

be done, contrary to and in violation of law or of any order, regulation

or directive of the commissioner or the supervising agency, as the case

may be, or which is improvident or prejudicial to the interest of the

public, the lienholders, the stockholders, or the tenants, the

commissioner or the supervising agency, as the case may be, may, in

addition to such other remedies as may be available, commence an action

or proceeding in the supreme court of the state of New York in the name

of the commissioner or the supervising agency, as the case may be, for

the purpose of having such violations or threatened violations stopped

and prevented, and in such action or proceeding the court may appoint a

temporary or permanent receiver or both. Such action or proceeding shall

be commenced by a petition to the supreme court, alleging the violation

complained of and praying for appropriate relief. It shall thereupon be

the duty of the court to specify the time, not exceeding twenty days

after service of a copy of the petition, within which the company

complained of must answer the petition. In case of any default or after

answer the court shall immediately inquire into the facts and

circumstances in such manner as the court shall direct without other or

formal pleadings, and without respect to any technical requirements.

Such other persons or corporations as it shall seem to the court

necessary or proper to join as parties in order to make its order or

judgment effective, may be joined as parties. The final judgment in any

such action or proceeding shall either dismiss the action or proceeding

or direct that an order or an injunction, or both, issue, or provide for

the appointment of a receiver as prayed for in the petition, and grant

such other relief as the court may deem appropriate.

8. The commissioner or supervising agency may modify supervision of a

company upon finding that duplicative supervisory functions may impose

an undue regulatory burden or unnecessary expenditure of agency

resources, by taking such actions as are deemed appropriate, including

consolidating supervisory functions associated with different programs,

and entering into memoranda of understanding with other agencies for the

allocation of supervisory functions.

§ 32-a — Additional supervision and regulation

Additional supervision and regulation. The commissioner or the

supervising agency, as the case may be, shall:

1. Promulgate regulations providing for recognition of duly

constituted tenants' associations and cooperators' advisory councils by

the commissioner or supervising agency, as the case may be, and

providing that a housing company shall meet on a regular basis with

representatives of such an association or council at the specific

project involved to discuss matters relating to the project. A duly

constituted cooperators' advisory council shall only be such a council

in a mutual company project prior to the election of a board of

directors by the tenant-cooperators.

2. Require every company to file with him, her or it an annual

operating budget for each individual project in the manner prescribed by

the commissioner or supervising agency.

3. Require every company to file with him, her or it semi-annual or

quarterly financial statements and an annual financial statement. Each

annual financial statement shall be accompanied by a certificate of the

company's independent certified public accountant. Such financial

statements shall be filed at the times and in the manner prescribed by

the commissioner or supervising agency.

4. Afford tenants access to and an opportunity to acquire copies of

all operating budgets or financial statements respecting the project in

which such tenants reside, to the extent that such budgets and

statements are required by law to be kept by the commissioner or

supervising agency.

5. Permit any tenant, duly constituted tenants' association, duly

constituted cooperators' advisory council or his, hers or its duly

authorized representative to audit the books of the company and to have

access during normal business hours to the financial records upon which

the company's financial statements are based.

6. Promulgate regulations relating to managing agents, including

criteria for the eligibility for selection and the compensation of

managing agents by companies organized pursuant to this article. Such

regulations shall provide, among other things, that any contract with a

managing agent entered into after September first, nineteen hundred

seventy-seven shall be terminable for cause and shall be terminable,

with or without cause, at least every twelve months after commencement

of the term thereof, and that promptly upon termination the managing

agent shall turn over to the company all project records, rent rolls,

bills, cancelled checks, bank statements and other papers owned by such

company.

7. Require that every company file with him, her or it, within six

months of the effective date of regulations implementing this

subdivision and in such format as shall be prescribed by the

commissioner or the supervising agency after consultation with the state

energy office, an energy audit report which identifies potential

energy-saving building improvements, including alterations,

modifications and adjustments to the building structure, heating,

cooling, lighting and ventilation systems; their relative costs;

potential energy and cost savings; and simple payback periods, which for

the purpose of this subdivision shall mean that period of time within

which the estimated cost of such improvements, exclusive of the cost of

capital, would be recovered from the savings generated by reduced energy

consumption resulting from the improvements. The energy audit shall be

conducted by a public utility, an engineer or architect licensed by the

state, or the managing agent or other representative of the company if

such individual has attended an energy audit training workshop sponsored

by the commissioner or the state energy office. A copy of the energy

audit report, required herein, shall be given to any duly constituted

tenant's association or cooperator's advisory council and a copy shall

be available for inspection and copying by any individual tenant who

requests it. The commissioner or supervising agency shall also require

that every company certify by March thirty-first, nineteen hundred

eighty-four that all compatible conservation measures identified in the

energy audit report which have simple payback periods of one year or

less have been implemented; provided, however, if the commissioner or

supervising agency determines within sixty days of the date the energy

audit report is filed that one or more of such identified conservation

measures cannot be implemented by March thirty-first, nineteen hundred

eighty-four, given the projected rent revenues and other monies

available to the company from reserve funds, loans or grants from the

state or federal government or any other source, the implementation of

such conservation measures shall be provided for according to a schedule

prescribed by the commissioner or supervising agency.

8. Every tenant or resident, or a person acting on behalf of a tenant

or resident, shall be permitted to copy, by photographic means, any

document within the scope of this section pertaining to the project in

which such tenant or resident resides. A reasonable fee, subject to a

maximum therefor prescribed in regulations, may be charged for such

copies.

* 9. Require that within ten days of the filing of any reports or

financial statements with the commissioner or supervising agency, the

housing company shall transmit a copy of said report or financial

statement to a duly constituted resident board of directors, and if

there be none, to a cooperator's advisory council or a duly constituted

tenants association representing the project concerned. Where no such

council or association exists in a project, a notice shall be posted

informing the residents of the location on the premises of the project

where a copy of said report or financial statement is available for

inspection. The notice shall be posted within ten days of filing, in a

prominent place on the premises of the project concerned.

* NB There are 2 sb 9's

* 9. Promulgate regulations to require each tenant use their dwelling

unit as their primary residence to maintain their right of continued

occupancy or be subject to eviction in a court of competent jurisdiction

by a mutual housing company.

* NB There are 2 sb 9's

10. Require every voting member of a board of directors of a mutual

company subject to the provisions of this article, elected or appointed

for a term beginning on or after the effective date of this subdivision,

to complete, within the first year of his or her term and at least once

every three years thereafter, a minimum of two hours of training, in

person or virtually, as the commissioner or supervising agency, as the

case may be, may deem appropriate on the financial oversight,

accountability and fiduciary responsibilities of a board member; and to

require every voting member of a board of directors of a mutual company

subject to the provisions of this article, elected or appointed for a

term beginning before the effective date of this subdivision, to

complete such training within one year of the effective date of this

subdivision and at least once every three years thereafter.

11. Require every voting member of a board of directors of a mutual

company subject to the provisions of this article, elected or appointed

for a term beginning on or after the effective date of this subdivision,

to complete, within the first year of his or her term and at least once

every three years thereafter, in addition to the training required by

subdivision ten of this section, a training course, in person or

virtually, as the commissioner or supervising agency, as the case be,

may deem appropriate, to acquaint him or her with the powers, functions

and duties of a board of directors of a mutual company subject to the

provisions of this article, as well as the powers and duties of other

governing and administrative authorities affecting such companies; and

to require every voting member of a board of directors of a mutual

company subject to the provisions of this article, elected or appointed

for a term beginning before the effective date of this subdivision, to

complete such training within one year of the effective date of this

subdivision and at least once every three years thereafter.

12. Require each member of a board of directors of a mutual company

subject to the provisions of this article to demonstrate compliance with

the requirements set forth in subdivisions ten and eleven of this

section by filing a certificate of completion of such course or courses

on a form to be promulgated by the commissioner. Such form shall be

filed with the secretary of the mutual company and maintained by the

secretary as a corporate record and distributed annually to the

shareholders and upon the filing of any director with the mutual company

of the intention to seek re-election to the position. Sixty days prior

to any scheduled election of members of the board of directors, the

secretary of the mutual company shall furnish the commissioner or the

supervising authority, as the case may be, with a list of all incumbent

directors indicating which individuals have submitted certificates

required in this subdivision. Such course or courses shall be provided

by the commissioner or supervising agency, as the case may be, at no

cost to the trainee or the board to which the trainee has been elected.

13. Develop the curricula used for training required by subdivisions

ten and eleven of this section for which the supervising agency or the

commissioner may request and shall receive the cooperation and

assistance from any departments, divisions, boards, bureaus, commissions

or agencies of the state and political subdivisions thereof in

developing such curricula. These curricula may be offered together as a

single course or separately. The training required by this section may

be offered by providers approved by the commissioner or supervising

agency, as the case may be. In approving other providers for these

trainings, the commissioner or supervising agency shall consider a

potential provider's understanding of cooperative homeownership; laws,

rules and regulations affecting mutual companies subject to the

provisions of this article; and the fiduciary responsibilities of the

board of a residential cooperative, as well as the experience of the

provider in delivering such training.

14. Hold such meeting or meetings, in person or virtually as the

commissioner or supervisory agency shall deem appropriate, with the

board of a mutual company on the financial oversight, accountability and

fiduciary responsibilities of such board; the powers, functions and

duties of such board; and the powers and duties of other governing and

administrative authorities affecting such company.

§ 32-b — Annual reports

Annual reports. The commissioner shall, on or before the first

day of July in each year, submit a report to the legislature, the state

comptroller, and the attorney general on the implementation of article

two of this chapter by the commissioner and the supervising agency and

the policy included therein. Such report shall include and not be

limited to rent and carrying charge levels, changes therein, operation

of the state capital grant program and federal subsidy programs, tax

abatement levels, total capital outlay, amortization, mortgage interest

rates, income levels served by the housing, surcharge billings and

collections and use of surcharge revenues, and vacancy rates. Such

report shall also include information regarding any limited-profit

housing company that has voluntarily dissolved in the preceding calendar

year, and any limited-profit housing company that has filed a notice of

intent to dissolve in the current calendar year with the commissioner

and the supervising agency. This information shall include, but not be

limited to, the name and address of the development, the number of units

in the development, a range of amounts of rent offered in the

development, the number of tenants in the development, the current

vacancy rate in the development, income levels served by the

development, how long the limited-profit housing company has

participated in the program, and any sales or transfers that have

occurred since the limited-profit housing company was created. For the

purpose of preparing such report, the commissioner may request, and

shall receive, from any municipality or supervising agency such data as

he deems necessary or desirable and such municipality or supervising

agency shall furnish the requested data within sixty days of such

request.

§ 33 — Tax exemptions

Tax exemptions. 1. (a) Upon the consent of the local legislative

body of any municipality in which a project is or is to be located, the

real property in a project shall be exempt from local and municipal

taxes, other than assessments for local improvements, to the extent of

all or part of the value of the property included in such project which

represents an increase over the assessed valuation of the real property,

both land and improvements, acquired for the project at the time of its

acquisition by the limited-profit housing company, provided, however,

that the real property in a project acquired for purposes of

rehabilitation shall be exempt to the extent of all or part of the value

of the property included in such project, and further provided that the

amount of such taxes to be paid shall not be less than ten per centum of

the annual shelter rent or carrying charges of such project except that

for projects located or to be located in a city of a population of one

million or more, the amount of such taxes shall be no more than five per

centum of the annual shelter rent or carrying charges of the project.

Upon the consent of the local legislative body of a municipality, other

than a city with a population of one million or more, in which the

project is located, the amount of such taxes may be further reduced to

five per centum or less of the annual shelter rent or carrying charges

of the project. Any such granted consent to reduce the amount of such

taxes shall expire every ten years. If such authorization is not

renewed, the rate of taxation shall revert to the level established

before the consent was granted. Shelter rent shall mean the total rents

received from the occupants of a project less the cost of providing to

the occupants electricity, gas, heat and other utilities. Total rents

shall include rent supplements and subsidies received from the federal

government, the state or a municipality on behalf of such occupants but

shall not include interest reduction payments pursuant to subdivision

(a) of section two hundred one of the Federal Housing and Urban

Development Act of nineteen hundred sixty-eight. The tax exemption shall

operate and continue so long as the mortgage loans of the company,

including any additional mortgage loan the proceeds of which are used

primarily for the residential portion of the project, which additional

loan is approved by the commissioner or the supervising agency, are

outstanding.

(b) Where a municipality acts on behalf of another taxing jurisdiction

in assessing real property for the purpose of taxation, or in levying

taxes therefor, the consent of the local legislative body of such

municipality shall have the effect of exempting the real property in a

project from local and municipal taxes, other than assessments for local

improvements, levied by or in behalf of both such taxing jurisdictions.

As used in this paragraph, the term "taxing jurisdiction" means any

municipal corporation or district corporation, including any school

district or any special district, having the power to levy or collect

taxes and benefit assessments upon real property, or in whose behalf

such taxes or benefit assessments may be levied or collected.

(c) Notwithstanding the provisions of paragraphs (a) and (b) of this

subdivision, the real property of a state urban development corporation

project acquired, owned, constructed, managed or operated by a company

incorporated pursuant to the not-for-profit corporation law and this

article shall be entitled to all the benefits provided by section four

hundred twenty-two of the real property tax law. The real property of a

state urban development corporation project, other than a state urban

development corporation project acquired, owned, constructed, managed or

operated by a company incorporated pursuant to the not-for-profit

corporation law and this article, shall be exempt from all local and

municipal taxes, other than assessments for local improvements, to the

extent of the value of the property included in such project as

represents an increase over the assessed valuation of the real property,

both land and improvements, acquired for the project on the date of its

acquisition by the limited-profit housing company, provided that the

amount of such taxes to be paid shall not be less than ten per centum of

the annual shelter rent or carrying charges of such project, as defined

in paragraph (a) hereof, except that in a city with a population of one

million or more, the amount of such taxes shall be no more than five per

centum of the annual shelter rent or carrying charges of the project.

Upon the consent of the local legislative body of the municipality,

other than a city with a population of one million or more, in which the

project is located, the amount of such taxes may be further reduced to

five per centum or less of the annual shelter rent or carrying charges

of the project. Any such granted consent to reduce the amount of such

taxes shall expire every ten years. If such authorization is not

renewed, the rate of taxation shall revert to the level established

before the consent was granted. The tax exemption shall operate and

continue so long as the mortgage loans of such limited profit housing

company, including any additional mortgage loan the proceeds of which

are used primarily for the residential portion of the project, which

additional loan is approved by the commissioner or the supervising

agency, are outstanding and the project is continued to be operated as a

limited-profit housing project. If a state urban development corporation

project qualifying for tax exemption pursuant to this paragraph is sold,

with the approval of the commissioner, to another limited-profit housing

company, such successor company shall be entitled to all the benefits of

this paragraph. In the event that such sale is to a company incorporated

pursuant to the not-for-profit corporation law and this article, such

successor company shall be entitled to all the benefits provided by

section four hundred twenty-two of the real property tax law.

(d) Notwithstanding the provisions of paragraphs (a) and (b) of this

subdivision, when a project is financed with a mortgage loan pursuant to

this article or article three of this chapter and (i) there is a

participation, new loan or investment pursuant to section twenty-three-b

of this article or (ii) such mortgage loan is assigned, modified or

satisfied pursuant to section twenty-three-a or forty-four-b or

subdivision twenty-two-a of section six hundred fifty-four of this

chapter, the real property of the project shall be exempt from all local

and municipal taxes, other than assessments for local improvements, to

the extent of the value of the real property included in such project

which represents an increase over the assessed valuation of the real

property, both land and improvements, acquired for the project on the

date of its original acquisition for the project by the original

mortgagor under a mortgage loan pursuant to this article or article

three of this chapter, provided that the amount of taxes to be paid on

the project shall not be less than ten per centum of the annual shelter

rent or carrying charges of such project, as defined in paragraph (a) of

this subdivision, except that in a city with a population of one million

or more, the amount of such taxes shall be no more than five per centum

of the annual shelter rent or carrying charges of the project. Upon the

consent of the local legislative body of the municipality, other than a

city with a population of one million or more, in which the project is

located, the amount of such taxes may be further reduced to five per

centum or less of the annual shelter rent or carrying charges of the

project. Any such granted consent to reduce the amount of such taxes

shall expire every ten years. If such authorization is not renewed, the

rate of taxation shall revert to the level established before the

consent was granted. Such tax exemption shall commence in each instance

from the date when the project becomes subject to a mortgage insured by

the federal government and shall operate and continue so long as a

mortgage on such project is insured or held by the federal government or

so long as the project is thereafter owned by the federal government or

so long as any residual indebtedness is outstanding, whichever is

longer. When there is a participation, new loan or investment pursuant

to section twenty-three-b of this article, such participation, new loan

or investment shall be deemed to be the equivalent of a federally

insured mortgage for purposes of this paragraph. Nothing contained in

this paragraph shall be construed to limit or otherwise impair the

benefits available to any company eligible for exemption from taxation

pursuant to section thirty-one or section thirty-six-a of this article,

section four hundred twenty-two or section four hundred sixty-seven-c of

the real property tax law, or section fifty-eight of the public housing

law. The foregoing shall not be deemed to authorize any company to

receive the benefits of any exemption from taxation in contravention of

the provisions of section two of article eighteen of the constitution.

(e) Notwithstanding the provisions of paragraph (a) of this

subdivision, a municipality, with the approval of the local legislative

body, may contract to exclude all or part of any rent subsidies received

from the federal government pursuant to section eight of the United

States Housing Act of nineteen hundred thirty-seven as amended in the

computation of total rents received.

(f) Notwithstanding the provisions of paragraph (a) of this

subdivision, if the number of units occupied by persons receiving the

benefit of rental assistance payments from the federal government

pursuant to section eight of the United States Housing Act of nineteen

hundred thirty-seven, as amended, with respect to any project increases

by more than one hundred percent within any twelve consecutive months

prior to nineteen hundred eighty-five over the number of units for which

such subsidies were available during the preceding twelve consecutive

months or as July first, nineteen hundred eighty, whichever is later,

taxes payable for such additional subsidized units and subsequent units

subsidized in the same manner shall be based solely upon that portion of

total rents received on account of such additional subsidized units that

is not funded by such rental assistance payments, provided, however,

that no project shall receive such additional tax exemption (i) unless a

minimum of seventeen percent of the units in the project receive the

benefit of such subsidies, or (ii) if any mortgage on such project is

insured or held by the federal government or if the project is owned by

the federal government. The amount of exemption to which a project is

entitled pursuant to this paragraph shall be certified annually by the

commissioner or the supervising agency, as the case may be.

2. Notwithstanding the provisions of subdivision one hereof, whenever

a dwelling in a project is leased to the New York state housing finance

agency pursuant to the provisions of section forty-four-a of this

chapter, so much of the assessed value of such project attributable to

such dwelling (including a pro rata portion of the value of the land and

common spaces) as represents an increase over the proportionate assessed

value of the real property, both land and improvements, acquired for

such project at the time of original acquisition therefor, shall be

exempt during the period of such lease from taxation for county, city,

town, village and school district purposes and special ad valorem

levies; provided that if in any year the aggregate amount of such taxes

and levies that would have been attributable to such dwelling but for

the exemption provided by this subdivision exceeds the amount payable

out of the low rent lease account pursuant to subdivision three of

section forty-four-a of this chapter with respect to the agency's rent

obligation for such dwelling, the agency shall make proportional

payments in lieu of such taxes and levies to the appropriate county,

city, town, village, school district or special district, or any

combination thereof as the case may be, in an aggregate amount equal to

one half of the sum of (a) the amount of such excess and (b) the amount,

if any, by which the rent paid to the agency under the sublease for such

dwelling exceeds the agency's rent obligation for such dwelling. Nothing

contained in this subdivision shall preclude the increase of the taxable

assessed value attributable to such dwellings as a result of a net

increase in the assessed valuation of the taxable property in the

assessing unit as a result of assessing such property at a higher ratio

of full value.

3. Notwithstanding the provisions of subdivision one hereof, whenever

a dwelling in a project is leased to an authority, pursuant to the

provisions of sections seventeen and thirty-one of this chapter, so much

of the assessed value of such project attributable to such dwelling

(including a pro rata portion of the value of the land and common

spaces) as represents an increase over the proportionate assessed value

of the real property, both land and improvements, acquired for such

project at the time of original acquisition therefor, shall be exempt

during the period of such lease from taxation for county, city, town,

village and school district purposes and special ad valorem levies.

Nothing contained in this subdivision shall preclude the increase of the

taxable assessed value attributable to such dwelling as a result of a

net increase in the assessed valuation of the taxable property in the

assessing unit as a result of assessing such property at a higher ratio

of full value.

4. Notwithstanding the provisions of subdivision one hereof, when a

mutual company is organized under this article to facilitate the

acquisition of a building by residents thereof, the amount of local and

municipal taxes, other than assessments for local improvements, to be

paid on the real property included in such project, both land and

improvements, shall not exceed twenty per centum of the annual shelter

rent or carrying charges of such project, as defined in paragraph (a) of

subdivision one hereof; provided, however, that where such acquisition

of a building by residents thereof involves the financing of

rehabilitation or other improvement as well as acquisition, upon the

consent of the local legislative body of the municipality in which the

project is located the amount of such taxes may be further reduced

provided that such amount shall not be less than ten per centum of the

annual shelter rent or carrying charges of the project, as defined in

paragraph (a) of subdivision one hereof; or the company may in lieu of

requesting such consent apply for the benefits of the local law, if any,

enacted pursuant to section four hundred eighty-nine of the real

property tax law. Notwithstanding any other provision of this

subdivision, in a city with a population of one million or more, the

amount of such taxes shall be no more than five per centum of the annual

shelter rent or carrying charges of the project. Upon the consent of the

local legislative body of the municipality, other than a city with a

population of one million or more, in which the project is located, the

amount of such taxes may be further reduced to five per centum or less

of the annual shelter rent or carrying charges of the project. Any such

granted consent to reduce the amount of such taxes shall expire every

ten years. If such authorization is not renewed, the rate of taxation

shall revert to the level established before the consent was granted.

Such tax exemption, if any, granted pursuant to this article shall

operate and continue so long as a loan made under this article or any

subsequent loan approved by the commissioner or the supervising agency

to enhance the residential portion of the project and the project is

continued to be operated for the purposes set forth in this article is

outstanding.

5. Bonds, mortgages, notes, income debentures and obligations of a

company are declared to be issued for a public purpose and to be public

instrumentalities and together with interest thereon shall be exempt

from tax including but not limited to the mortgage recording taxes

imposed by article eleven of the tax law.

6. Any project that received a tax exemption under paragraphs (a), (c)

and (d) of subdivision one, and subdivision four of this section may,

upon the expiration of the tax exemption period, be granted an

additional tax exemption period of up to fifty years, or until such time

as the project is no longer operated under the restrictions and for the

purposes set forth in this article, whichever is sooner.

§ 34 — Foreclosure and judgments

Foreclosure and judgments. 1. Any action or proceeding to

foreclose a mortgage upon a company project, shall be in accordance with

the applicable provisions of section ninety-four of this chapter.

2. In the event of an unsatisfied judgment against a company any

action not pertaining to the collection of a mortgage indebtedness,

shall be in accordance with the applicable provision of section

ninety-five of this chapter.

3. For the purpose of this section, wherever reference is made in

sections ninety-four and ninety-five of this chapter to a housing

company, it shall be deemed to refer to a company as defined in this

article.

§ 35 — Voluntary dissolution

Voluntary dissolution. 1. A company aided by a loan made prior

to May first, nineteen hundred fifty-nine, may voluntarily be dissolved,

with the consent of the commissioner or of the supervising agency, as

the case may be, not less than thirty-five years after the occupancy

date upon the payment in full of the remaining balance of principal and

interest due and unpaid upon the mortgage held by the state or a

municipality pursuant to this article and payment to the municipality of

a sum equal to the total of all accrued taxes for which tax exemption

was granted and received pursuant to section thirty-three of this

article, provided however that such payment of accrued taxes shall be

waived if a company is voluntarily dissolved subsequent to the original

maturity date of any mortgage held by the state or a municipality

pursuant to this article.

2. A company aided by a loan made after May first, nineteen hundred

fifty-nine, may voluntarily be dissolved, without the consent of the

commissioner or of the supervising agency, as the case may be, not less

than twenty years after the occupancy date upon the payment in full of

the remaining balance of principal and interest due and unpaid upon the

mortgage or mortgages and of any and all expenses incurred in effecting

such voluntary dissolution.

3. Upon such dissolution, title to the project may be conveyed in fee

to the owner or owners of its capital stock or to any corporation

designated by it or them for the purpose, or the company may be

reconstituted pursuant to appropriate laws relating to the formation and

conduct of corporations, provided, however, that prior to any such

dissolution and conveyance or reconstitution, payment shall be made of

all current operating expenses, taxes, indebtedness and all accrued

interest thereon and the par value of and accrued dividends on the

outstanding stock of such company. If after making such payments, and

after conveyance of the project, a surplus remains in the treasury of

the company, such surplus, except in the case of a project aided by a

state loan made after May first, nineteen hundred fifty-nine, shall upon

dissolution, be paid into the general fund of the municipality which

granted tax exemption. After such dissolution and conveyance, or such

reconstitution, the provisions of this article shall become and be

inapplicable to any such project and its owner or owners and any tax

exemption granted with respect to such project pursuant to section

thirty-three hereof shall cease and terminate.

4. (a) Notwithstanding any contrary provision of subdivision one or

three of this section or of any other law or local law, consent to

dissolve a company aided by a loan made prior to May first, nineteen

hundred fifty-nine shall be given by the commissioner or the supervising

agency, as the case may be, thirty-five years or more after the

occupancy date, provided that:

(i) such company's project or projects is or are located in a city of

less than one million and more than three hundred thousand persons;

(ii) the dissolution of such company is part of a refinancing plan to

continue the operation of the existing project or projects under this

chapter by a new company organized pursuant to the provisions of this

article in corporate, partnership, or individual ownership form as the

existing stockholders shall agree;

(iii) if the refinancing is done by a new first mortgage, the new

company shall be bound to pay from the proceeds of such refinancing the

remaining balance of the principal and interest on the original mortgage

and any interest due to debenture holders if such interest cannot first

be paid out of the original company's surplus or reserves; or if the

refinancing is done by a second mortgage, the new company shall be bound

to pay from the proceeds of such refinancing the interest due to

debenture holders if such interest cannot first be paid out of the

original company's surplus or reserves; and

(iv) the new company shall be bound to use at least fifty percent of

the net proceeds, which remain from such refinancing after having paid

the legal fees and development costs connected therewith and after

having made the payments required by subparagraph (iii) of this

paragraph, to finance the costs of refurbishing the existing housing

units of the project, or to build and operate under this chapter

additional housing units for persons of low or moderate income or for

disabled persons, within the same municipality wherein the original

project is or projects are located, or to do both such refurbishing of

existing units and such building and operating of such additional units;

any portion of the net proceeds remaining after utilization of at least

fifty percent thereof for the foregoing purposes shall be distributed or

used as the stockholders, partners or sole owner (as the case may be) of

the new company shall decide.

(b) The New York state housing finance agency and the state of New

York mortgage agency are hereby authorized and empowered to finance such

first or second mortgages for the foregoing refinancing purposes upon

such terms and conditions as each such agency deems appropriate.

(c) A company which is voluntarily dissolved in accordance with this

subdivision shall not be required to pay the taxes referred to in

subdivision one of this section nor any surplus remaining in its

treasury as referred to in subdivision three of this section to the

municipality which grants the tax abatement for such project or

projects, but instead, such surplus and all reserve accounts and

debenture rights, titles, interests, contracts, accounts receivable,

accounts payable, and all other assets and liabilities of the dissolved

company shall be transferred to the new company organized for such

refinancing purposes pursuant to such refinancing plan, and such new

company shall be considered for all the purposes of this chapter as a

company aided by a loan made subsequent to May first, nineteen hundred

fifty-nine, with the first date of occupancy deemed to be the date of

the closing of the new first or the second mortgage entered into as part

of the refinancing plan described in subparagraphs (ii), (iii) and (iv)

of paragraph (a) of this subdivision; and any tax abatement granted by

such municipality for such project or projects shall continue to be

applied unless or until such municipality shall act to extend, modify,

enlarge or remove such tax abatement.

§ 35-a — Requirements regarding dissolution

Requirements regarding dissolution. Mutual housing companies

considering dissolution and/or reconstitution pursuant to section

thirty-five of this article shall be subject to the following

requirements:

1. Any preliminary vote to authorize a feasibility study, or to

approve a special assessment to fund such feasibility study shall

require the approval of a minimum of two-thirds of all dwelling units

for which shares have been issued by the mutual housing company,

regardless of whether such dwelling units are occupied or vacant,

provided however, that where the shareholder of record is deceased, any

vote attributable to the dwelling unit shall be discounted, both in the

number of votes cast and in the total number of dwelling units upon

which the vote is calculated, until such time as a new shareholder of

record is determined for that dwelling unit.

2. Except as provided for in subdivision seven of this section, any

vote to authorize the funding, development, and submission to the

attorney general of an offering plan for dissolution and reconstitution

of the mutual housing company, or to authorize the funding, development,

and submission to the attorney general of a proxy statement, or any

other documents permitted by the attorney general instead of such

offering plan, or any other preliminary vote for review by the

commissioner or supervising agency relating to the dissolution or

reconstitution required by the regulations of the commissioner or

supervising agency, shall require the approval of eighty percent of all

dwelling units for which shares have been issued, regardless of whether

such dwelling units are occupied or vacant, provided however, that where

the shareholder of record is deceased, any vote attributable to the

dwelling unit shall be discounted, both in the number of votes cast and

in the total number of dwelling units upon which the vote is calculated,

until such time as a new shareholder of record is determined for that

dwelling unit.

3. No funds from the operating budget of the mutual housing company

shall be used for the preparation or distribution of a feasibility

study, a preliminary or filed offering plan for dissolution and

reconstitution of the mutual housing company, a proxy statement or any

other documents permitted by the attorney general instead of such

offering plan, or a notice of intent to dissolve, or to pay for any

services related to evaluation of, preparation for, or execution of

dissolution and/or reconstitution pursuant to section thirty-five of

this article, including but not limited to legal services, but such

funds may only be raised by special assessment voted on and applicable

to all shareholders using such procedures as required by regulations of

the commissioner or the supervising agency which shall not allow

proxies.

4. Except as provided for in subdivision seven of this section, any

vote authorized by the regulations promulgated by the commissioner or

the supervising agency that constitutes the vote for submission of a

certificate of no objection, consent to dissolution or reconstitution,

for submission to the attorney general of an offering plan for

dissolution and reconstitution of the mutual housing company, or for

submission to the attorney general of a proxy statement or any other

documents permitted by the attorney general instead of such offering

plan shall require the approval of eighty percent of all dwelling units

for which shares have been issued by the mutual housing company,

regardless of whether such dwelling units are occupied or vacant,

provided however, that where the shareholder of record is deceased, any

vote attributable to the dwelling unit shall be discounted, both in the

number of votes cast and in the total number of dwelling units upon

which the vote is calculated, until such time as a new shareholder of

record is determined for that dwelling unit.

5. No vote as set forth pursuant to subdivision one, two, three or

four of this section, shall occur within five years following a vote

undertaken pursuant to such subdivisions that failed to pass. No vote as

set forth pursuant to subdivision seven of this section shall occur

within three years following a vote undertaken pursuant to such

subdivision that failed to pass.

6. For any vote pursuant to subdivision one, two, three or seven of

this section, the proposal to be voted on shall state that the cost of

the action to be approved will be paid by a special assessment on

shareholders, that approval of the proposal authorizes the mutual

housing company to impose the assessment, and shall include the total

dollar amount of the proposed assessment and the dollar amount per

dwelling unit that will be imposed to fund the action if it is approved.

Once an assessment has been so approved by shareholder vote, the mutual

housing company shall not increase the amount of the approved assessment

except by further vote subject to the same procedures and threshold for

approval as were required for the vote initially approving the

assessment.

7. Notwithstanding any other provision to the contrary, any final or

preliminary vote regarding dissolution and reconstitution that involves

a conversion to a housing company organized under article eleven of this

chapter including, but not limited to, votes on the authorization to

fund, develop, and submit any required filing to the attorney general,

which pursuant to the conversion shall remain under the supervision of

the commissioner or the supervising agency, shall only require a vote of

a minimum of two thirds of the dwelling units for which shares have been

issued by the mutual housing company regardless of whether such dwelling

units are occupied or vacant, provided however, that where the

shareholder of record is deceased, any vote attributable to the dwelling

unit shall be discounted, both in the number of votes cast and in the

total number of dwelling units upon which the vote is calculated, until

such time as a new shareholder of record is determined for that dwelling

unit. Provided further however, that any dissolution and reconstitution

to a housing company organized under article eleven of this chapter as

provided by this subdivision shall not utilize funds from the operating

budget of such housing company to fund the preparation, creation or

distribution of any materials required for a vote to authorize any

dissolution and reconstitution to a housing company organized under

article eleven of this chapter as provided by this subdivision, and the

preparation, creation or distribution of such materials shall be

financed by special assessment voted on and applicable to all

shareholders as provided by subdivision three of this section, unless

such housing company took any actions toward dissolution or

reconstitution prior to the date this section took effect.

§ 36 — Sale of project prior to termination of tax exemption

Sale of project prior to termination of tax exemption. 1.

Except as otherwise provided in this article and prior to the expiration

of thirty-five years from the date of occupancy, a project, other than a

project aided by a loan made after May first, nineteen hundred

fifty-nine, shall not be sold except to a company organized pursuant to

the provisions of this article; prior to the expiration of twenty years

from the date of occupancy, a project aided by a loan made after May

first, nineteen hundred fifty-nine, shall not be sold except to a

company organized pursuant to the provisions of this article. Such

successor company shall acquire such project subject to all the

provisions of the loan and mortgage contract and the provisions of this

article, and shall be entitled to all the benefits provided in such

contract or granted under this article, and a company so conveying all

its projects may be dissolved with the consent of the commissioner or

the supervising agency, as the case may be.

2. In the event of any sale described in this section, the

stockholders of the dissolving company shall in no event receive more

than the par value of their stock with accrued and unpaid dividends upon

such stock.

§ 36-a — Additional powers of municipalities

Additional powers of municipalities. In addition to any other

powers granted to a municipality by law, and notwithstanding the

provisions of any other law, a municipality acting by its local

legislative body shall have power:

1. To undertake, plan, develop, construct or enter into contracts for

the planning, development or construction of, or to own one or more

projects or any part thereof, or to engage in one or more of such

activities in respect to one or more projects or any part thereof. For

any of the purposes of this subdivision, a municipality may contract

either with a housing company incorporated under this article or with a

housing development fund company incorporated pursuant to article eleven

of this chapter.

2. (a) Acquire by purchase, gift, devise, lease, condemnation or

otherwise, in accordance with the provisions of the appropriate general,

special or local law applicable to the acquisition of real or personal

property by such municipality, real or personal property or any interest

therein necessary for or incidental to a project, including but not

limited to air rights, and easements or other rights of user necessary

for the use and development of such air rights, to be developed as air

rights sites for a project; provided, however, that the acquisition of

any air rights over railroad tracks, rights of way or facilities and

easements or other rights of user necessary for the use and development

of such air rights are to be subject to the provision of section

fifty-one-a of the railroad law. The acquisition of real property

pursuant to a plan shall in every case be deemed to be and constitute a

continuous rather than separate takings.

(b) Property so acquired by a municipality shall be exempt from

taxation until sold, leased for a term not exceeding ninety-nine years

or otherwise disposed of in accordance with the provisions of this

section; provided however, that any such municipality shall have the

power and authority, with respect to such property, to pay or transfer,

out of funds available to it for the effectuating of such program or

project annual sums in lieu of taxes to any taxing jurisdiction

providing services to the project area, or to the part or portion

thereof within such taxing jurisdiction, in order that no such taxing

jurisdiction shall suffer an inequitable loss of revenue by virtue of

such project; provided, further, that the amount so paid or transferred

for any year with respect to any such property shall not exceed the

lesser of (1) the sum last levied for the benefit of such taxing

jurisdiction as an annual tax on such property prior to the time of its

acquisition for project purposes or (2) such amount as shall be approved

by the commissioner pursuant to such rules, regulations, limitations and

conditions as he may prescribe, as an eligible and proper charge against

such project. Upon the sale, lease or disposition of such property to

any person, firm or corporation, not entitled to an exemption from

taxation or entitled to only a partial tax exemption such property shall

immediately become subject to taxation in whole or in part, as the case

may be, and shall be taxed pro rata for the unexpired portion of the

taxable year.

As used in this paragraph, the term "taxing jurisdiction" means any

municipal corporation or district corporation, including any school

district or any special district, having the power to levy or collect

taxes and benefit assessments upon real property, or in whose behalf

such taxes or benefit assessments may be levied or collected.

3. To sell or lease for a term not exceeding ninety-nine years any

such project, or part thereof, at any stage before or at the date of or

after the physical completion of such project, to a company which will

undertake, plan, construct, own, manage or operate such project in

accordance with the plan and the provisions of this article. In the

event of a sale or lease of any such project prior to the physical

completion thereof, the municipality may agree to complete and may

complete construction and development of such project or cause the same

to be completed. Any such sale or lease may be made without public

bidding, public sale or public offering pursuant to such negotiated

contract, agreement or lease, containing such provisions, limitations,

requirements, terms and conditions, price or rental as the governing

body of the municipality may deem necessary or desirable to effectuate

the plan and the public policy and public purposes described in sections

eleven and eleven-a of this article.

4. Notwithstanding the provisions of section thirty-three of this

article the real property in a project sold or leased as provided in

this section, when the transfer thereunder becomes effective, shall be

exempt from local and municipal taxes, other than assessments for local

improvements to such extent as may be granted by the local legislative

body of the municipality. The tax exemption shall operate and continue

so long as capital loans of the company to which such project shall have

been sold or leased or any additional loan the proceeds of which are

primarily used for the residential portion of the project, which

additional loan is approved by the commissioner or the supervising

agency are outstanding.

Notes, bonds, mortgages and other obligations of such a company are

declared to be issued for a public purpose and to be public

instrumentalities and, together with interest thereon, shall be exempt

from tax.

5. The provisions of section thirteen of this article requiring the

approval by the commissioner of housing of the persons incorporating a

limited-profit housing company and the provisions of section fourteen of

this article requiring the consent of the commissioner of housing to the

filing of the certificate of incorporation of such a company in the

office of the secretary of state and the amendment thereof shall not

apply to a corporation created pursuant to this article on a cooperative

basis for the purchase or lease of a project pursuant to this section;

nor shall any of the provisions of this article conferring upon the

commissioner of housing any powers in respect of limited-profit housing

companies apply to such a corporation. The application of this

subdivision shall be limited to corporations undertaking a project with

the aid of a municipal loan under this article.

6. A project or part of a project sold or leased to a housing company

pursuant to the provisions of this section thirty-six-a shall be owned

or operated by such housing company in accordance with the provisions of

this article and in accordance with an agreement of sale or lease to be

entered into by the municipality and such housing company. Each such

agreement shall contain, in addition to such other terms and conditions

as may lawfully be agreed upon by the parties, the following provisions,

which shall be subject to any approvals which may be required by this

article:

(a) Establishing a schedule of maximum rents which may be charged by

the housing company.

(b) Prescribing the method by which tenants are to be selected for the

project and criteria of tenant eligibility.

(c) Any such agreement of lease may provide for the transfer of title

of the real property so leased to the housing company at the end of the

term or lease.

7. A housing company shall have the power, in addition to any other

powers under this article to enter into and carry out the provisions of

any agreement authorized under this section or under section

twenty-three-a or twenty-three-b of this article, and to enter into and

carry out agreements in order to obtain insurance by the federal

government of a mortgage for the purpose of refinancing all or any part

of a mortgage loan pursuant to section twenty-three of this article.

8. Any project that received a tax exemption under this section may,

upon the expiration of the tax exemption period, be granted an

additional tax exemption period of up to fifty years, or until such time

as the project is no longer operated under the restrictions and for the

purposes set forth in this article, whichever is sooner.

§ 37 — Separability clause

Separability clause. 1. Except as specifically provided in this

article, nothing contained therein shall be deemed to limit or restrict

any power or authority granted to banking institutions, foundations,

labor unions, veterans' organizations, or insurance companies or to any

other corporation or to any fiduciary by any other provision of law

heretofore or hereafter enacted.

2. If any clause, sentence, paragraph, section or part of this article

shall be adjudged by any court of competent jurisdiction to be invalid

such judgment shall not affect, impair or invalidate the remainder

thereof, but shall be confined in its operation to the clause, sentence,

paragraph, section or part thereof directly involved in the controversy

in which such judgment shall have been rendered.

ARTICLE 3 New York State Housing Finance Agency

§ 40 — Short title

Short title. This article may be cited as the "New York state

housing finance agency act."

§ 41 — Statement of legislative findings and purposes

Statement of legislative findings and purposes. 1. There

continues to exist in the state a seriously inadequate supply of safe

and sanitary dwelling accommodations, non-housekeeping accommodations,

aged care accommodations or accommodations for handicapped persons

within the financial reach of families and persons (including aged and

handicapped persons) of low income. This condition is contrary to the

public interest and threatens the health, safety, welfare, comfort and

security of the people of the state.

2. The ordinary operations of private enterprise cannot provide an

adequate supply of safe and sanitary dwelling accommodations,

non-housekeeping accommodations, aged care accommodations and

accommodations for handicapped persons at rentals which families and

persons of low income can afford. In order to encourage the investment

of private capital and provide such dwelling accommodations,

non-housekeeping accommodations, aged care accommodations and

accommodations for handicapped persons provision should be made for

mortgage loans, at low interest rates, to housing companies which,

subject to state regulation as to rents, profits, dividends and

disposition of their property, supply multiple dwelling accommodations,

non-housekeeping accommodations, aged care accommodations and

accommodations for handicapped persons, and other facilities incidental

or appurtenant thereto, to such families and persons. For that purpose

there should be created a corporate governmental agency of the state, to

be known as the "New York state housing finance agency," which, through

the issuance of its bonds, notes or other obligations to the private

investing public, may attract a broad base of investment by the greatest

number of the general public and obtain the funds necessary to make or

finance the making of such mortgage loans. Thus, private capital will be

encouraged to enter this field of investment and will help meet the

housing needs of families and persons of low income. Provision should

also be made for the New York state housing finance agency to lease such

dwelling accommodations and to receive appropriations from the state, in

aid of providing housing in limited profit housing company projects for

persons and families of low income who would otherwise be eligible for

occupancy in low rent public housing.

* 2-a. Programs to attract capital to provide dwelling accommodations

which families and persons of low and moderate income can afford may not

be economically feasible without adequate subsidy where all of the units

in the multiple dwelling accommodations to be financed are regulated as

to rents, profits, dividends and disposition of the owner's property. In

such cases the New York state housing finance agency should provide

residential units for such families and persons by making loans, or

financing the making of such loans, to the owners of housing

developments which will be required to supply, for a reasonable period

of time, a portion of residential units to such families and persons at

rentals they can afford. Further it is the policy of the state through

the New York state housing finance agency to maximize as fully as

possible consistent with the economic feasibility of each housing

development the affordability, period of occupancy, and number of units

in those portions of each housing development which are designed to be

affordable to persons of low and moderate income.

* NB Repealed July 23, 2027

3. There is also threatened in the state an inadequate supply of

academic buildings and other facilities at the state-operated

institutions and statutory and contract colleges under the jurisdiction

of the state university of New York when needed and when scheduled under

the approved master plan of the state university. In order to encourage

the investment of private capital in such academic buildings and other

facilities and to assure their timely construction, acquisition,

reconstruction, rehabilitation and improvement, the New York state

housing finance agency should also be empowered, through the issuance of

its bonds, notes or other obligations to the private investing public,

to obtain a portion of the funds necessary to finance such academic

buildings and other facilities at the state-operated institutions and

statutory and contract colleges under the jurisdiction of the state

university of New York.

4. Further, it is the policy of the state to promote the redevelopment

and reconstruction of municipal urban renewal areas in a manner that

will serve the civic, cultural and recreational needs of the community

as a whole. The ordinary operations of private enterprise cannot provide

adequate financing for the construction of civic, cultural and

recreational structures and facilities and other non-profit capital

development projects invested with a public interest, which are needed

in connection with urban renewal programs. In order to encourage the

investment of private capital in such projects, and to assure the

expeditious undertaking, financing and completion of the redevelopment

and reconstruction of urban renewal areas in the municipalities of the

state, the New York state housing finance agency should also be

empowered, through the issuance of its bonds, notes or other obligations

to the private investing public, to obtain the funds necessary to make

mortgage loans, at low interest rates, to non-profit community

development corporations for the acquisition and construction of such

projects, structures and facilities.

5. Prompt provision of well-equipped, modern hospitals, schools and

other facilities related to the care, maintenance and treatment of

mentally ill persons, mental defectives and epileptics is also needed in

the state. In order to encourage the investment of private capital in

such hospitals, schools and other mental hygiene facilities and to

assure their timely construction, acquisition, reconstruction,

rehabilitation and improvement, the New York state housing finance

agency should be empowered, through the issuance of its bonds, notes or

other obligations to the private investing public, to obtain a portion

of the funds necessary to finance the same and to meet the needs of

patients and staff at such facilities.

6. A serious shortage of safe and sanitary nursing home accommodations

providing therein nursing care, lodging and board by or under the

supervision of a duly licensed physician to sick, invalid, infirm,

disabled or convalescent persons of low income or providing

health-related service as defined in article twenty-eight of the public

health law to persons of low income or any combination of the foregoing,

and in addition thereto, providing nursing care and health-related

service, or either of them, to persons of low income who are not

occupants of the project, whose need for such facilities and services

cannot readily be provided by the ordinary unaided operation of private

enterprise, exists in many communities throughout the state that it is

the policy of the state to promote the provision of such nursing home

accommodations, including such other facilities as may be incidental and

appurtenant thereto; that there is need for non-profit corporations and

limited-profit corporations to construct, acquire, reconstruct,

rehabilitate and improve such low cost nursing home accommodations. In

order to encourage the investment of private capital in such nursing

homes, the New York state housing finance agency should also be

empowered, through the issuance of its bonds, notes or other obligations

to the private investing public, to obtain funds necessary to finance

nursing homes.

7. There is a serious shortage throughout the state of facilities

suitable for use for the care of children especially those of pre-school

age and primary school age whose parents are unable to provide such care

for all or a substantial portion of the day or post-school day. A

similar shortage of residential child care facilities also exists.

Existing day care and residential child care facilities are overcrowded

with long waiting lists. Many such facilities are so located that they

are not accessible to families in need of such services. The absence of

adequate day care and residential child care facilities is contrary to

the interest of the people of the state, is detrimental to the health

and welfare of the child and his parents and often prevents the gainful

employment of persons, who are otherwise qualified, because of the need

to provide such care in their home. In order to encourage the investment

of private capital in such facilities and to assure their timely

construction, acquisition, reconstruction, rehabilitation and

improvement, the New York state housing finance agency should be

empowered, through the issuance of its bonds, notes or other obligations

to the private investing public, to obtain a portion of the funds

necessary to finance such facilities and to meet the needs of the

community.

8. Prompt provision of new and improved community mental health and

developmental disabilities facilities is required for the care and

treatment of the increasing number of persons afflicted with mental

illness, mental deficiencies, epilepsy and behavior or emotional

disorders; that such facilities should be located close to the people

they serve in order to speed rehabilitation and restoration and to

provide for out-patient and in-patient care, including after care,

diagnostic and rehabilitative services and residential accommodations

for operation as hostels; that it is the policy of the state to promote

the provision of such community mental health and developmental

disabilities facilities; that there is a need for non-profit

corporations to construct low cost community mental health and

developmental disabilities facilities. In order to encourage the

investment of private capital in such community mental health and

developmental disabilities facilities, and to assure the expeditious

completion of such community mental health and developmental

disabilities facilities, the New York state housing finance agency

should be empowered, through the issuance of its bonds, notes or other

obligations to the private investing public, to obtain funds necessary

to make mortgage loans, at low interest rates, to non-profit

corporations for the construction, acquisition, reconstruction,

rehabilitation or improvement of such mental health and developmental

disabilities facilities.

9. Many hospitals and other health facilities throughout the state are

becoming obsolete and are no longer adequate to meet the needs of modern

medicine. As a result of rapid technological changes, such facilities

require substantial structural or functional changes. Others are

unsuited for continued use by virtue of their location and the physical

characteristics of their existing plants and should be replaced. Such

inadequate and outmoded facilities deny to the people of the state the

benefits of health care of the highest quality efficiently and promptly

provided and at a reasonable cost. Their replacement and modernization

is essential to protect and prolong the lives of the state's population

and cannot be readily accomplished by the ordinary unaided operation of

private enterprise. It is the policy of the state to encourage the

provision of modern, well-equipped health facilities, including such

other facilities as may be incidental and appurtenant thereto. In

furtherance of this end and in order to obtain the investment of private

capital in such hospitals and other health facilities, the New York

state housing finance agency should also be empowered through the

issuance of its bonds, notes or other obligations to the private

investing public, to obtain the funds necessary to finance such hospital

and health facilities.

10. Prompt provision of new and improved community senior citizens

facilities is required for the increasing number of persons who are in

need of programs and services for the aging. Such facilities should be

located close to the people they serve and should supplement the

programs and services provided for such persons by the office for the

aging pursuant to title one of article two of the elder law; that it is

the policy of the state to promote the provision of such facilities;

that there is need for non-profit corporations to construct low cost

community senior citizens facilities. In order to encourage the

investment of private capital in such community senior citizens

facilities, and to assure the expeditious completion of such facilities,

the New York state housing finance agency should be empowered, through

the issuance of its bonds, notes or other obligations to the private

investing public, to obtain funds necessary to make mortgage loans, at

low interest rates, to non-profit corporations for the construction,

acquisition, reconstruction, rehabilitation or improvement of such

facilities.

11. It is frequently appropriate to combine and coordinate the

development, rehabilitation and provision of housing with the

development, rehabilitation and provision of health and health related

facilities such as intermediate care, skilled nursing, aged treatment,

and hospice facilities for which there is also a need. In order to

encourage the investment of private capital in non-profit housing and

health facilities, and to assure the expeditious completion of such

facilities, the New York state housing finance agency should be

empowered, through the issuance of its bonds, notes or other obligations

to the private investing public, to obtain funds necessary to finance

loans, for the construction, acquisition, reconstruction, rehabilitation

or improvement of such facilities.

§ 42 — Definitions

Definitions. As used or referred to in this article, unless a

different meaning clearly appears from the context:

1. "Agency" shall mean the corporate governmental agency created by

section forty-three of this article.

1-a. "Amortized value" shall mean, when used with respect to

securities purchased at a premium above or a discount below par, the

value as of any given date obtained by dividing the total amount of the

premium or discount at which such securities were purchased by the

number of days remaining to maturity on such securities at the time of

such purchase and by multiplying the amount so calculated by the number

of days having passed since the date of such purchase; and (a) in the

case of securities purchased at a premium, by deducting the product thus

obtained from the purchase price, and (b) in the case of securities

purchased at a discount, by adding the product thus obtained to the

purchase price.

2. "Bonds" and "notes" shall mean bonds and notes respectively, issued

by the agency pursuant to this article.

3. "Equity bonds" and "equity notes" shall mean bonds and notes

respectively, issued by the agency pursuant to subdivision four of

section forty-six of this article.

4. "Equity loan" shall mean a loan made by the agency to a mutual

company, mutual housing company, mutual redevelopment company, or

housing development fund company which is organized pursuant to the

business corporation law and article eleven of this chapter, in an

amount not to exceed nine per centum of project cost and not in excess

of the aggregate face value of home owners purchase notes received by

such mutual company, mutual housing company, mutual redevelopment

company, or housing development fund company, as the case may be, for

the issuance of shares.

4-a. "Federally-aided mortgage loan" shall mean a loan secured by a

first mortgage lien on the real property of which a project consists and

the personal property attached to or used in connection with the

construction, acquisition, reconstruction, rehabilitation, improvement

or operation of the project, made or financed by the agency to the owner

of such property, which loan is insured or co-insured by the federal

government or in connection with which there has been assigned or

pledged to the agency the right to receive housing assistance payments

to be made by the federal government under a contract entered into

pursuant to section eight of the United States housing act of nineteen

hundred thirty-seven, as amended or supplemented, provided, however,

that such term shall not include mortgage loans made by the agency and

insured by the federal government pursuant to subsection (f) of section

two hundred twenty-three of such act, to refinance mortgage loans made

by the agency or the state prior to the first day of June, nineteen

hundred seventy-nine or theretofore or thereafter, amended, modified, or

increased or loans provided for pursuant to subdivision twenty-nine-a of

section forty-four of this article. Where all or part of the cost of

acquiring any real property included in the project is to be financed by

a federally-aided mortgage loan the term "owner" shall mean the owner

upon such acquisition. Nothing contained herein shall limit or prohibit

the agency from consenting to the modification of any instrument

executed in connection with a federally-aided mortgage loan, provided

that such modification will not materially reduce the value of the

security for such mortgage loan.

4-b. "Federally guaranteed security" means any security, investment or

evidence of indebtedness which is issued pursuant to the national

housing act or any successor provision of law, as amended, which is

either, directly or indirectly, insured or guaranteed in full as to the

repayment of principal and interest by the United States of America or

any instrumentality thereof.

5. "Home owners purchase note" shall mean home owners purchase note as

defined in article one of this chapter.

5-a. "Insured mortgage reserve fund" shall mean the fund created by

section fifty-seven of this chapter.

6. "Mortgage loan" shall mean a loan made by the agency to a company

in an amount not to exceed ninety per centum of the project cost, except

that in the case of a mutual company, an urban rental company which has

not been aided by any loan made prior to September first, nineteen

hundred sixty-eight, or a non-profit company incorporated pursuant to

the provisions of the not-for-profit corporation law and this chapter

for the purpose of providing housing for staff members, employees or

students of a college, university, hospital or child care institution

and their immediate families or in the case of a community development

corporation the loan shall not exceed ninety-five per centum of the

project cost and in the case of a non-profit company incorporated

pursuant to the provisions of the not-for-profit corporation law and

this chapter for the purpose of providing housing for aged or

handicapped persons of low income or in the case of a low income

non-profit housing company the loan shall not exceed the total project

cost, and secured by a first mortgage lien on the real property of which

the project consists and the personal property attached to or used in

connection with the construction, acquisition, reconstruction,

rehabilitation, improvement or operation of the project. "Company,"

"mutual company," "urban rental company," "project cost" and "project"

shall mean company, mutual company, urban rental company, project cost

and project, respectively, as defined in article two of this chapter.

6-a. "Mortgage loan" shall also mean a loan made by the agency to a

community senior citizens center and services company in an amount not

to exceed the total project cost of a project undertaken by such company

pursuant to article seven-A of this chapter, and secured by a first

mortgage lien on the real property of which the project consists and the

personal property attached to or used in connection with the

construction, acquisition, reconstruction, rehabilitation, improvement

or operation of the project.

6-b. "Mortgage loan" shall also mean a loan made by the agency to an

eligible borrower as defined in article twenty-eight-B of the public

health law in an amount not to exceed the total hospital project cost

and secured by a first mortgage lien on the real property of which the

hospital project consists and the personal property attached to or used

in connection with the construction, acquisition, reconstruction,

rehabilitation, improvement or operation of the hospital project. Such

loan may be further secured by such a lien upon other real property

owned by the eligible borrower. Notwithstanding the foregoing provisions

of this subdivision or any other provisions of this article to the

contrary, any personal property may be excluded from the lien of the

mortgage provided (a) the commissioner of health finds that such

property is not essential for the rendition of required hospital

services as such term is defined in article twenty-eight of the public

health law, and (b) the agency consents to such exclusion. "Hospital

project cost" and "hospital project" shall mean hospital project cost

and hospital project, respectively, as defined in article twenty-eight-B

of the public health law.

6-c. "Mortgage loan" shall also mean a loan made by the agency to a

limited-profit nursing home company incorporated pursuant to the

provisions of article twenty-eight-A of the public health law in an

amount not to exceed ninety-five per centum of the nursing home project

cost, and in the case of a non-profit nursing home company incorporated

pursuant to the provisions of article twenty-eight-A of the public

health law and the not-for-profit corporation law in an amount not to

exceed the total nursing home project cost, and secured by a first

mortgage lien on the real property of which the nursing home project

consists and the personal property attached to or used in connection

with the construction, acquisition, reconstruction, rehabilitation,

improvement or operation of the nursing home project. Notwithstanding

the foregoing provisions of this subdivision or any other provision of

this article to the contrary, any personal property may be excluded from

the lien of the mortgage provided (a) the commissioner of health finds

that such property is not essential for the nursing home project as such

term is defined in article twenty-eight-A of the public health law, and

(b) the agency consents to such exclusion. "Nursing home company",

"limited-profit nursing home company", "non-profit nursing home

company", "nursing home project cost" and "nursing home project" shall

mean nursing home company, limited-profit nursing home company,

non-profit nursing home company, nursing home project cost and nursing

home project, respectively, as defined in article twenty-eight-A of the

public health law.

6-d. "Mortgage loan" shall also mean a loan made by the agency to a

company incorporated pursuant to the provisions of the not-for-profit

corporation law in an amount not to exceed the total community mental

health services project cost or community developmental disabilities

services project cost, and secured by a first mortgage lien on the real

property of which the community mental health services project or

community developmental disabilities services project consists and the

personal property attached to or used in connection with the

construction, acquisition, reconstruction, rehabilitation, improvement

or operation of the community mental health services project or

community developmental disabilities services project. "Community mental

health services company," "community developmental disabilities services

company," "community mental health services project cost," "community

developmental disabilities services project cost," "community mental

health services project" and "community developmental disabilities

services project" shall mean community mental health services company,

community developmental disabilities services company, community mental

health services project cost, community developmental disabilities

services project cost, community mental health services project and

community developmental disabilities services project, respectively.

6-e. "Mortgage loan" shall also mean a loan made by the agency to a

non-profit corporation which is an eligible borrower as defined in title

five-A of article six of the social services law in an amount not to

exceed the total youth facilities project cost, and secured by a first

mortgage lien on the real property of which the youth facilities project

consists and the personal property attached to or used in connection

with the construction, acquisition, reconstruction, rehabilitation,

improvement or operation of the youth facilities project. "Youth

facilities project cost" and "youth facilities project" shall mean youth

facilities project cost and youth facilities project, respectively, as

defined in title five-A of article six of the social services law.

6-f. "Mortgage loan" shall also mean an instrument or instruments made

by a company to evidence residual indebtedness, which instrument or

instruments are secured by a mortgage on the real property of the

project.

* 6-g. "Mortgage loan" shall also mean a loan secured by a first

mortgage lien on the real property of which a project consists and the

personal property attached to or used in connection with the

construction or rehabilitation of the project, made or financed by the

agency to the owner of such property, which property a municipal housing

authority, constituted, created or established pursuant to article

thirteen of the public housing law, has agreed to purchase upon the

completion of such construction or rehabilitation.

* NB There are 2 sb 6-g's

* 6-g. "Mortgage loan" shall also mean a loan made by the agency to a

mutual housing company for the purpose of refinancing the existing

mortgage indebtedness of such company in an amount not to exceed the

cost of refinancing the existing mortgage indebtedness of such company

and necessary funds for the replacement, improvement and rehabilitation

of the project owned by such company, all costs incurred by such company

relating to the refinancing of the existing mortgage indebtedness

including amounts required to establish escrow accounts, reserves and

working capital as determined by the agency, and such other amounts as

are permitted by article four of this chapter, and secured by a first

mortgage lien on the real property of which the project consists and the

personal property attached to or used in connection with the

construction, acquisition, reconstruction, rehabilitation, improvement

or operation of the project.

* NB (Operative pending ruling by Internal Revenue Service)

* NB There are 2 sb 6-g's

7. "Mutual company", "mutual housing company" and "mutual

redevelopment company" shall mean mutual company, mutual housing company

and mutual redevelopment company as defined in articles two, four and

five, respectively, of this chapter.

8. "Non-profit company" shall mean a company incorporated pursuant to

the provisions of the not-for-profit corporation law and article two of

this chapter for the purpose of providing housing for staff members,

employees or students of a college, university, hospital or child care

institution and their immediate families or for handicapped or aged

persons of low income or housing for persons of low income or housing

for families of low income as defined under article two of this chapter.

9. "Community development corporation" shall mean a corporation

incorporated pursuant to the provisions of the not-for-profit

corporation law and article six-A of this chapter.

10. "Non-profit project bonds" and "non-profit project notes" shall

mean bonds and notes respectively, issued by the agency for the purposes

of making mortgage loans to mutual companies, non-profit companies or

community development corporations paying interest on such bonds and

notes, establishing reserves to secure such bonds and notes, and paying

of all other expenditures of the agency incident to and necessary or

convenient for the making of such mortgage loans.

11. "Hospital and nursing home project bonds" and "hospital and

nursing home project notes" shall mean bonds and notes respectively,

issued by the agency for the purposes of making mortgage loans to

hospital corporations which are eligible borrowers as defined in article

twenty-eight-B of the public health law or nursing home companies,

paying interest on such bonds and notes, establishing reserves to secure

such bonds and notes, and paying of all other expenditures of the agency

incident to and necessary or convenient for the making of such mortgage

loans.

12. "Urban rental project bonds" and "urban rental project notes"

shall mean bonds and notes respectively, issued by the agency after

August thirty-first, nineteen hundred sixty-eight, for the purposes of

making mortgage loans to urban rental companies, paying interest on such

bonds and notes, establishing reserves to secure such bonds and notes,

and paying of all other expenditures of the agency incident to and

necessary or convenient for the making of such mortgage loans.

13. "Youth facilities project bonds" and "youth facilities project

notes" shall mean bonds and notes, respectively, issued by the agency

for the purposes of making mortgage loans to non-profit corporations

which are eligible borrowers as defined in title five-A of article six

of the social services law, paying interest on such bonds and notes,

establishing reserves to secure such bonds and notes, and paying of all

other expenditures of the agency incident to and necessary or convenient

for the making of such mortgage loans.

14. "Community mental health services and developmental disabilities

services project bonds" and "community mental health services and

developmental disabilities services project notes" shall mean bonds and

notes, respectively, issued by the agency for the purposes of making

mortgage loans to companies incorporated pursuant to the not-for-profit

corporation law, paying interest on such bonds and notes, establishing

reserves to secure such bonds and notes, and paying of all other

expenditures of the agency incident to and necessary or convenient for

the making of such mortgage loans.

14-a. "Community mental health services and developmental disabilities

services project revenue bonds" and "community mental health services

and developmental disabilities services project revenue notes" shall

mean bonds and notes, respectively, issued by the agency for the purpose

of making mortgage loans to companies incorporated pursuant to the

not-for-profit corporation law and article seventy-five of title E of

the mental hygiene law, paying interest on such bonds and notes,

establishing reserves to secure such bonds and notes, and paying of all

other expenditures of the agency incident to and necessary or convenient

for the making of such mortgage loans.

15. "Community senior citizens services project bonds" and "community

senior citizens services project notes" shall mean bonds and notes,

respectively, issued by the agency for the purposes of making mortgage

loans to companies incorporated pursuant to the not-for-profit

corporation law and article seven-A of this chapter, paying interest on

such bonds and notes, establishing reserves to secure such bonds and

notes, and paying of all other expenditures of the agency incident to

and necessary or convenient for the making of such mortgage loans.

16. "State of New York municipal bond bank agency bonds" and "State of

New York municipal bond agency notes" shall mean bonds and notes,

respectively, issued by the state of New York municipal bond bank agency

for the purposes of purchasing municipal bonds from municipalities.

17. "New York state medical care facilities finance agency bonds" and

"New York state medical care facilities finance agency notes" shall mean

bonds and notes, respectively, issued by the New York state medical care

facilities finance agency for the corporate purposes of the New York

state medical care facilities finance agency.

18. "New York state project finance agency bonds" and "New York state

project finance agency notes" shall mean bonds and notes, respectively,

issued by the New York state project finance agency for the corporate

purposes of the New York state project finance agency.

19. "Residual indebtedness." Residual indebtedness shall be

indebtedness of a company in an amount equal to the unpaid principal

balance due on the original mortgage plus all interest accrued thereon

at such time as the mortgage is refinanced less an amount equal to the

principal amount, when made, of the mortgage insured by the federal

government in connection with the refinancing of a project. Such

indebtedness shall be secured by a mortgage which may be subordinate to

the lien of any mortgage loan insured by the federal government and may

contain such terms and conditions not inconsistent with this article as

may be approved by the commissioner, and as the agency may deem

necessary or desirable to secure the repayment of such residual

indebtedness.

* 20. "Revenue housing bonds" shall mean bonds issued by the agency

after May thirty-first, nineteen hundred seventy-six for the purpose of

making mortgage loans to mutual companies, non-profit companies, or

urban rental companies, funding non-profit project notes and urban

rental project notes issued for the purpose of making such mortgage

loans, paying interest on such bonds, establishing reserves to secure

such bonds and paying all other expenditures of the agency incident to

and necessary or convenient for the making of such mortgage loans or the

funding of such notes.

* NB (Effective until ruling by Internal Revenue Service)

* 20. "Revenue housing bonds" shall mean bonds issued by the agency

after May thirty-first, nineteen hundred seventy-six for the purpose of

making mortgage loans to mutual companies, mutual housing companies,

non-profit companies, or urban rental companies, funding non-profit

project notes and urban rental project notes issued for the purpose of

making such mortgage loans, paying interest on such bonds, establishing

reserves to secure such bonds and paying all other expenditures of the

agency incident to and necessary or convenient for the making of such

mortgage loans or the funding of such notes.

* NB (Effective pending ruling by Internal Revenue Service)

21. "Special revenue housing coverage reserve funds" shall mean the

funds created by section fifty-eight of this article.

22. "Bond reserve insurance fund" shall mean the fund created by

section fifty-nine of this article.

* 23. "Lending institution" shall mean any bank or trust company or

savings bank, or any corporation, association or other entity which is

owned or controlled by any one or more such bank or trust company or

savings bank, or any savings and loan association, credit union, federal

national mortgage association approved mortgage banker, national banking

association, federal savings and loan association, federal savings bank,

public pension fund, pension fund with assets over fifty million

dollars, insurance company, federal credit union or other financial

institution or governmental agency of the United States which

customarily makes, purchases, holds, insures or services residential

mortgages.

* NB Effective until July 23, 2027

* 23. "Lending institution" shall mean any bank or trust company or

savings bank, or any corporation, association or other entity which is

owned or controlled by any one or more such bank or trust company or

savings bank, or any savings and loan association, industrial bank,

credit union, federal national mortgage association approved mortgage

banker, national banking association, federal savings and loan

association, pension fund, insurance company, federal credit union or

other financial institution or governmental agency of the United States

which customarily makes, purchases, holds or services residential

mortgages.

* NB Effective July 23, 2027

* 24. "Housing development" shall mean a specific work or improvement,

whether or not to effectuate all or any part of a plan, and consisting

of five or more residential units, and including the lands, buildings

and improvements acquired, owned, constructed, managed or operated to

provide such units and such incidental and appurtenant commercial,

recreation, cultural, communal, dining, medical and nursing treatment,

day care or residential child care and community facilities as may be

approved by the agency. As used in connection with the term housing

development, the term residential unit shall refer to units suitable for

residential use or accommodations included within the term housing as

defined in subdivision nine of section twelve of this chapter.

* NB Repealed July 23, 2027

25. "Housing and non-profit health facility" shall mean a specific

work or improvement, whether or not to effectuate all or any part of a

plan consisting of five or more residential units, and at the election

of the agency such additional health and health related facilities as

the agency may approve; and including the lands, buildings and

improvements acquired, owned, constructed, managed or operated to

provide such units and health, or health related facilities and such

incidental and appurtenant commercial, recreation, cultural, communal,

dining, parking, day care or residential child care, senior citizen and

community facilities as may be approved by the agency acquired, owned,

constructed, rehabilitated, improved, managed or operated by a

non-profit company except that any portion thereof meeting the

definition of a housing development set forth in subdivision twenty-four

hereof may be separately owned by a for profit owner approved by the

agency. As used in connection with the term housing and non-profit

health facility, the term residential unit shall refer to units suitable

for residential use or accommodations included within the term housing

as defined in subdivision nine of section twelve of this chapter, and

the term non-profit company shall mean a company incorporated pursuant

to the provisions of the not-for-profit corporation law for the purpose

of providing housing for staff members, employees, students or users of

a hospital, health, health related facility and their immediate families

or for the purpose of providing a hospital, health, or health related

facility.

§ 43 — New York state housing finance agency

New York state housing finance agency. 1. There is hereby

created the "New York state housing finance agency". The agency shall be

a corporate governmental agency constituting a public benefit

corporation. Its membership shall consist of the commissioner of

housing and community renewal, the director of the budget, the

commissioner of taxation and finance, one member appointed by the

temporary president of the senate, and one member appointed by the

speaker of the assembly. In addition, there shall be four members to be

appointed by the governor with the advice and consent of the senate. The

members first appointed by the governor shall serve for terms ending

three, four, five and six years respectively from January first next

succeeding the date of their appointment. Their successors shall serve

for terms of six years each. Members shall continue in office until

their successors have been appointed and qualified. The members

appointed by the temporary president of the senate and the speaker of

the assembly shall serve at the pleasure of the temporary president of

the senate and the speaker of the assembly respectively. In the event of

a vacancy occurring in the office of any member by death, resignation or

otherwise, such vacancy shall be filled, for the unexpired term, if

applicable, in the same manner as the original appointment. The

provisions of section thirty-nine of the public officers law shall apply

to such members.

2. The governor shall designate from among the members appointed by

him or her a chairman, who shall serve as such during his or her term as

member. The members, including the chairman, shall serve without salary

or other compensation, but each member, including the chairman, shall be

entitled to reimbursement for actual and necessary expenses incurred in

the performance of his or her official duties and in the event that the

chairman shall also be a full time officer or employee of the agency,

the chairman shall receive no salary as chairman but shall receive only

his or her regular salary as officer or employee, not to exceed the

average of the salaries paid to the appointed commissioners of the state

departments or the regular salary such officer or employee was receiving

at the time of his or her appointment as chairman, whichever is greater.

3. Such members other than the commissioner of housing and community

renewal, the director of the budget, the commissioner of taxation and

finance and the chairman if he be a full time officer or employee of the

agency, may engage in private employment, or in a profession or

business, subject to the limitations contained in sections seventy-three

and seventy-four of the public officers law. The agency shall, for the

purposes of sections seventy-three and seventy-four of the public

officers law, be a "state-agency," and such members shall be "officers"

of the agency for the purposes of said sections.

4. Notwithstanding any inconsistent provisions of law, general,

special or local, no officer or employee of the state, or of any civil

division thereof, shall be deemed to have forfeited or shall forfeit his

office or employment by reason of his acceptance of membership on the

agency created by this section; provided, however, a member who holds

such other public office or employment shall receive no additional

compensation or allowance for services rendered pursuant to this

article, but shall be entitled to reimbursement for his actual and

necessary expenses incurred in the performance of such services.

5. The governor may remove any member for inefficiency, neglect of

duty or misconduct in office after giving him a copy of the charges

against him, and an opportunity to be heard, in person or by counsel, in

his defense, upon not less than ten days' notice. If any such member

shall be removed, the governor shall file in the office of the

department of state a complete statement of charges made against such

member, and his findings thereon, together with a complete record of the

proceeding. The holding of office by the commissioner of housing shall

continue to be governed by the provisions of section eleven of the

public housing law.

6. The agency and its corporate existence shall continue until

terminated by law, provided, however, that no such law shall take effect

so long as the agency shall have bonds, notes and other obligations

outstanding. Upon termination of the existence of the agency, all its

rights and properties shall pass to and be vested in the state.

7. The powers of the agency shall be vested in and exercised by no

less than six of the members thereof then in office. The agency may

delegate to one or more of its members, or its officers, agents and

employees, such powers and duties as it may deem proper.

8. The commissioner of housing and community renewal, the director of

the budget and the commissioner of taxation and finance each may appoint

a person from their respective division or department to represent such

member, respectively, at all meetings of the agency from which such

member may be absent. Any such representative so designated shall have

the power to attend and to vote at any meeting of the agency from which

the member so designating him as a representative is absent with the

same force and effect as if the member designating him were present and

voting. Such designation shall be by written notice filed with the

chairman of the agency by each of the said members. The designation of

such persons shall continue until revoked at any time by written notice

to the chairman by the respective member making the designation. Such

designation shall not be deemed to limit the power of the appointing

member to attend and vote at any meeting of the agency.

§ 44 — Powers of the agency

Powers of the agency. Except as otherwise limited by this

article, the agency shall have power:

1. To sue and be sued;

2. To have a seal and alter the same at pleasure;

3. To make and execute contracts and all other instruments necessary

or convenient for the exercise of its power and functions under this

article;

4. To make and alter by-laws for its organization and internal

management and, subject to agreements with noteholders or bondholders,

to make rules and regulations governing the use of its property and

facilities, which rules and regulations shall be filed with the

department of state in the manner provided by section one hundred two of

the executive law;

5. To acquire, hold and dispose of personal property for its corporate

purposes;

6. To appoint officers, agents and employees, prescribe their duties

and fix their compensation, subject to the provisions of the civil

service law and to the rules and regulations of the civil service

commission of this state;

7. To borrow money and issue negotiable notes, bonds or other

obligations and to provide for the rights of the holders thereof;

8. Subject to any agreements with noteholders or bondholders, to

invest any funds held in reserve or sinking funds, including the insured

mortgage reserve fund and any special revenue housing coverage reserve

fund or any monies not required for immediate use or disbursement, at

the discretion of the agency, in obligations of the state or the United

States government or obligations the principal and interest of which are

guaranteed by the state or the United States government, or in any other

obligations in which the comptroller of the state of New York is

authorized to invest pursuant to section ninety-eight of the state

finance law;

9. Subject to the approval of the commissioner in the case of mortgage

loans to other than hospital corporations which are eligible borrowers

as defined in article twenty-eight-B of the public health law or nursing

home companies, non-profit corporations which are eligible borrowers as

defined in title five-A of article six of the social services law, or

companies incorporated pursuant to the not-for-profit corporation law

and article seventy-five of the mental hygiene law, who shall be guided

by the provisions governing state loans contained in article two of this

chapter, to make mortgage loans, to participate with the state in making

mortgage loans and to undertake commitments to make any such mortgage

loans;

9-a. Subject to the approval of the commissioner of social services of

the state of New York, to make mortgage loans and to undertake

commitments to make mortgage loans to community senior citizens centers

and services companies under and pursuant to article seven-A of this

chapter.

10. Subject to the approval of the commissioner of housing and

community renewal, the state commissioner of health, the state

commissioner of mental hygiene or the state commissioner of social

services, as the case may be, to sell, at public or private sale, any

mortgage or other obligation securing a mortgage loan made by the

agency;

* 10-a. To acquire and to contract to acquire, by assignment or

otherwise, any mortgage securing a loan and any note or bond made by a

mutual housing company and to modify or satisfy such mortgage, bond or

note and accept or make a new mortgage and other instruments for the

purpose of refinancing the existing indebtedness of such company.

* NB (Effective pending ruling by Internal Revenue Service)

11. (a) In connection with the making or financing the making of

mortgage loans and commitments therefor, except mortgage loans and

commitments made with hospital corporations which are eligible borrowers

as defined in article twenty-eight-B of the public health law, nursing

home companies, non-profit corporations which are eligible borrowers as

defined in title five-A of article six of the social services law, or

companies incorporated pursuant to the not-for-profit corporation law

and article seventy-five of the mental hygiene law, to make and collect

such fees and charges, including but not limited to reimbursement of all

costs of financing by the agency, service charges and insurance

premiums, as the agency shall determine to be reasonable and as shall be

approved by the commissioner of housing;

(b) In connection with the making of mortgage loans and commitments

therefor to hospital corporations which are eligible borrowers as

defined in article twenty-eight-B of the public health law or nursing

home companies, to make and collect from such corporations and companies

such fees and charges, including but not limited to reimbursement of all

costs of financing by the agency, service charges and insurance

premiums, as the agency shall determine to be reasonable;

(c) In connection with the making of mortgage loans and commitments

therefor to non-profit corporations which are eligible borrowers as

defined in title five-A of article six of the social services law, to

make and collect from such corporations such fees and charges, including

but not limited to reimbursement of all costs of financing by the

agency, service charges and insurance premiums as the agency shall

determine to be reasonable.

(d) In connection with the making of mortgage loans and commitments

therefor to companies incorporated pursuant to the not-for-profit

corporation law and article seventy-five of the mental hygiene law, to

make and collect from such companies such fees and charges, including

but not limited to reimbursement of all costs of financing by the

agency, service charges and insurance premiums, as the agency shall

determine to be reasonable.

11-a. In connection with the making of mortgage loans and commitments

therefor to companies incorporated pursuant to the not-for-profit

corporation law and article seven-A of this chapter, to make and collect

from such companies such fees and charges, including but not limited to

reimbursement of all costs of financing by the agency, service charges

and insurance premiums, as the agency shall determine to be reasonable.

11-b. To make or finance the making of federally-aided mortgage loans

pursuant to section forty-four-c of this article and, in connection with

such mortgage loans, to exercise such powers and undertake such

responsibilities as may be required by any law, regulation or other

requirement of the federal government.

11-c. Subject to the provisions of any contract with noteholders and

bondholders (a) to make and contract for the making of mortgage loans

for the construction or rehabilitation of projects which a municipal

housing authority, constituted, created or established pursuant to

article thirteen of the public housing law, has agreed to purchase on a

turnkey basis in accordance with a federally assisted program for the

production of public housing as authorized by the United States housing

act of nineteen hundred thirty-seven as amended to the date of enactment

of this subdivision of this section, upon the completion of such

construction or rehabilitation and (b) to make and to contract for the

making of loans to, or to purchase loans from banking or other lending

institutions for the purpose of financing such construction or

rehabilitation.

12. In connection with any property on which it has made or financed a

mortgage loan, to foreclose on any such property or commence any action

to protect or enforce any right conferred upon it by any law, mortgage,

contract or other agreement, and to bid for and purchase such property

at any foreclosure or at any other sale, or acquire or take possession

of any such property; and in such event the agency may complete,

administer, pay the principal of and interest on any obligations

incurred in connection with such property, dispose of, and otherwise

deal with, such property, in such manner as may be necessary or

desirable to protect the interests of the agency therein;

13. To enter into agreements to pay annual sums in lieu of taxes to

any political subdivision of the state with respect to any real property

owned by the agency; provided, however, that the amount so paid for any

year upon any such property shall not exceed the sum last paid as taxes

on such property prior to the time of its acquisition by the agency;

14. To procure insurance against any loss in connection with its

property and other assets (including mortgages, mortgage loans and

federally guaranteed securities secured by such mortgage loans) in such

amounts, and from such insurers, as it deems desirable;

15. (a) Subject to the approval of the commissioner and to the

provisions of any contract with noteholders or bondholders, except with

any holders of hospital and nursing home project bonds or notes or youth

facilities project bonds or notes, or community mental health services

and developmental disabilities services project bonds or notes, whenever

it deems it necessary or desirable in the fulfillment of the purposes of

this article, to consent to the modification, with respect to rate of

interest, time of payment of any installment of principal or interest,

security, or any other term, of any mortgage, mortgage loan, mortgage

loan commitment, contract or agreement of any kind to which the agency

is a party, except such mortgages, mortgage loans, mortgage loan

commitments, contracts or agreements as may have been entered into with

hospital corporations which are eligible borrowers as defined in article

twenty-eight-B of the public health law, nursing home companies or

non-profit corporations which are eligible borrowers as defined in title

five-A of article six of the social services law or companies

incorporated pursuant to the not-for-profit corporation law and article

seventy-five of the mental hygiene law;

(b) Subject to the provisions of any contract with holders of hospital

and nursing home project bonds or notes, whenever it deems it necessary

or desirable in the fulfillment of the purposes of this article, to

consent to the modification, with respect to rate of interest, time of

payment of any installment of principal or interest, security, or any

other term of any mortgage, mortgage loan, mortgage loan commitment,

contract or agreement of any kind between the agency and a hospital

corporation which is an eligible borrower as defined in article

twenty-eight-B of the public health law or a nursing home company;

(c) Subject to the provisions of any contract with holders of youth

facilities project bonds or notes, whenever it deems it necessary or

desirable in the fulfillment of the purposes of this article, to consent

to the modification, with respect to rate of interest, time of payment

of any installment of principal or interest, security, or any other term

of any mortgage, mortgage loan, mortgage loan commitment, contract or

agreement of any kind between the agency and a non-profit corporation

which is an eligible borrower pursuant to title five-A of article six of

the social services law.

(d) Subject to the provisions of any contract with holders of

community mental health services and developmental disabilities services

project bonds or notes, whenever it deems it necessary or desirable in

the fulfillment of the purposes of this article, to consent to the

modification, with respect to rate of interest, time of payment of any

installment of principal or interest, security, or any other term of any

mortgage, mortgage loan, mortgage loan commitment, contract or agreement

of any kind between the agency and a company incorporated pursuant to

the not-for-profit corporation law and article seventy-five of the

mental hygiene law.

15-a. Subject to the provisions of any contract with holders of

community senior citizens services project bonds or notes, whenever it

deems it necessary or desirable in the fulfillment of the purposes of

this article, to consent to the modification, with respect to rate of

interest, time of payment of any installment of principal or interest,

security, or any other term of any mortgage, mortgage loan, mortgage

loan commitment, contract or agreement of any kind between the agency

and a company incorporated pursuant to the not-for-profit corporation

law and article seven-A of this chapter.

16. To accept any gifts or grants or loans of funds or property or

financial or other aid in any form from the federal government or any

agency or instrumentality thereof or from the state or from any other

source and to comply, subject to the provisions of this article, with

the terms and conditions thereof;

17. To engage the services of private consultants on a contract basis

for rendering professional and technical assistance and advice;

18. Subject to the approval of the commissioner of housing and

community renewal, to make equity loans to mutual companies, mutual

housing companies, mutual redevelopment companies, and housing

development fund companies which are corporations organized pursuant to

the business corporation law and article eleven of this chapter, in

amounts not to exceed the aggregate face value of home owners purchase

notes accepted by such mutual companies, mutual housing companies,

mutual redevelopment companies, or housing development fund companies,

as the case may be, as consideration for the issuance of shares pursuant

to the provisions of section nineteen of article two of this chapter,

section seventy-eight of article four of this chapter, section one

hundred eight of article five of this chapter, or subdivision four of

section five hundred seventy-three of article eleven of this chapter, as

the case may be; such loans shall be repaid over or within such period

and shall be secured in such manner as the agency shall require and the

commissioner shall approve.

19. Subject to the approval of the commissioner of health pursuant to

the provisions of article twenty-eight-A of the public health law, to

make mortgage loans to non-profit nursing home companies incorporated

pursuant to the provisions of article twenty-eight-A of the public

health law and the not-for-profit corporation law and to make mortgage

loans to limited-profit nursing home companies incorporated pursuant to

the provisions of article twenty-eight-A of the public health law and to

undertake commitments to make any such mortgage loans.

20. Subject to the approval of the commissioner, to purchase or to

contract to purchase from a mutual company, or from any shareholder

thereof, as the case may be, the shares appertaining to the dwellings

leased by it for the purposes set forth in section forty-four-a of this

article, to hold such shares or to sell or to contract to sell such

shares to the sublessees of the agency who are residents in such

dwellings, or to the designees of the mutual company. Such shares shall

be purchased or sold by the agency for the par value thereof. The terms

under which such shares may be sold, or be contracted to be sold shall

be subject to the approval of the commissioner. Shares owned by the

agency may not be voted.

21. Subject to the approval of the commissioner of social services

pursuant to the provisions of title five-A of article six of the social

services law, to make mortgage loans to non-profit corporations which

are eligible borrowers pursuant to the provisions of the aforesaid title

five-A and to undertake commitments to make any such mortgage loans.

21-a. Subject to the approval of the commissioner of social services

of the state of New York pursuant to the provisions of article seven-A

of this chapter, to make mortgage loans to companies incorporated

pursuant to the provisions of such article and the not-for-profit

corporation law and to undertake commitments to make any such mortgage

loans.

22. Subject to the approval of the commissioner of mental hygiene

pursuant to the provisions of article seventy-five of the mental hygiene

law, to make loans to companies incorporated pursuant to the provisions

of article seventy-five of the mental hygiene law and the not-for-profit

corporation law and to undertake commitments to make any such mortgage

loans. No such loan or commitment made on or after June first, nineteen

hundred eighty-two, shall be made primarily for a purpose other than the

refinancing of existing indebtedness pursuant to subdivision four of

section 75.05 of the mental hygiene law.

23. Subject to the approval of the commissioner of health pursuant to

the provisions of article twenty-eight-B of the public health law, to

make mortgage loans to hospital corporations which are eligible

borrowers as defined in article twenty-eight-B of the public health law

and to undertake commitments to make any such mortgage loans.

24. To contract with the state of New York municipal bond bank agency

to render such services as the agency may deem appropriate, including

but not limited to the use of the premises, personnel and personal

property of the agency and to charge the reasonable costs thereof and

provide for the reimbursement to the agency for any expenses necessarily

incurred by the agency in carrying out the terms of such contract. Any

such contract shall be subject to the separate approval of the director

of the budget.

25. To contract with the New York state medical care facilities

finance agency to market and service any New York state medical care

facilities finance agency bonds and New York state medical care

facilities finance agency notes approved by the New York state medical

care facilities finance agency, and to contract to render such other

services as the New York state medical care facilities finance agency

may request, including but not limited to the use of the premises,

personnel and personal property of the agency, and to provide for

reimbursement to the agency from the New York state medical care

facilities finance agency for any expenses necessarily incurred by the

agency in carrying out the terms of any such contract. Any such contract

shall be subject to the separate approval of the director of the budget.

26. To contract with the New York state project finance agency to

market and service any New York state project finance agency bonds and

New York state project finance agency notes approved by the New York

state project finance agency, and to contract to render such other

services as the New York state project finance agency may request,

including but not limited to the use of the premises, personnel and

personal property of the agency, and to provide for reimbursement to the

agency from the New York state project finance agency for any expenses

necessarily incurred by the agency in carrying out the terms of any such

contract. Any such contract shall be subject to the separate approval of

the director of the budget.

27. To contract with the New York state urban development corporation

to market and service any New York state urban development corporation

bonds and New York state urban development corporation notes approved by

the New York state urban development corporation and to contract to

render such other services as the New York state urban development

corporation may request, including but not limited to the use of the

premises, personnel and personal property of the agency, and to provide

for reimbursement to the agency from the New York state urban

development corporation for any expenses necessarily incurred by the

agency in carrying out the terms of any such contract. Any such contract

shall be subject to the separate approval of the director of the budget.

28. To participate in federal programs for the insurance of mortgage

loans including programs which require the agency to share any loss

arising out of any mortgage loan insured by the federal government,

provided that the agency's share of any such loss shall not exceed fifty

percent thereof.

28-a. To acquire and enter into commitments to acquire any federally

guaranteed security to finance the making of mortgage loans pursuant to

section forty-four-c of this article and to pledge or otherwise use any

such federally guaranteed security in such manner as the agency deems in

its best interest to secure or otherwise provide a source of repayment

on bonds issued to finance the making of such mortgage loans.

29. To do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

article.

* 29-a. (1) Subject to the provisions of any contract with noteholders

and bondholders (a) to make and contract for the making of loans for the

acquisition, construction or rehabilitation of housing developments for

the purpose of providing residential units for occupancy by persons and

families for whom the ordinary operations of private enterprise cannot

provide an adequate supply of safe, sanitary and affordable housing

accommodations or for residential units located in an area designated as

blighted pursuant to article fifteen or sixteen of the general municipal

law, and (b) to make and to contract for the making of loans to or to

purchase loans from lending institutions for the purpose of financing

loans for such acquisition, construction or rehabilitation. No loans may

be financed pursuant to this subdivision unless the agency finds that

portions of the housing developments are to be occupied by persons or

families of low or moderate income. In determining whether the portions

of housing developments will be so occupied, the agency may consider and

rely upon the fact that the housing developments will be occupied by

persons and families in accordance with requirements for the interest on

obligations issued to finance them to be exempt from taxation pursuant

to section 103(b)(3) or 103(b)(4)(A) of the Internal Revenue Code of

1954, as amended.

(2) With regard to any loan made pursuant to this subdivision and

notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, or local law enacted pursuant thereto, the

rent stabilizaton law of nineteen hundred sixty-nine, or the emergency

tenant protection act of nineteen seventy-four, the owner of a housing

development otherwise subject to any such law or act, with the approval

of the agency, may establish the initial rent for each dwelling unit

within the project. If the initial rents are to be established pursuant

hereto, the agency shall notify occupants of the housing development, if

any, of any such proposed rental establishment and offer to meet at

least once with the occupants prior to its approval.

(3) The powers granted by this subdivision may be exercised only if

(a) obligations of the agency have been issued to fund the loan made or

purchased by the agency and such obligations have received an investment

grade rating from a recognized rating agency; (b) the loan made or

purchased by the agency is fully secured as to principal and interest by

insurance or a commitment to insure issued by the state of New York

mortgage agency or by the general credit of a bank, national bank, trust

company, savings bank, savings and loan association, insurance company,

governmental agency of the United States, or any combination thereof; or

(c) obligations of the agency are purchased by a bank, national bank,

trust company, savings bank, savings and loan association, insurance

company, governmental agency of the United States, which for purposes of

this subdivision, include the federal home loan mortgage corporation,

the federal national mortgage association, the governmental national

mortgage association, and any successor of the foregoing, or any

wholly-owned subsidiary or combination thereof.

* NB Repealed July 23, 2027

29-b. To carry out its powers and responsibilities with respect to

permanent housing projects for homeless families as provided for in

article three-A of this chapter.

30. (1) Subject to the provisions of any contract with noteholders and

bondholders (a) to make and contract for the making of loans for the

acquisition, refinancing, construction or rehabilitation of housing and

non-profit health facilities and (b) to make and to contract for the

making of loans to or to purchase loans from lending institutions for

the purposes of financing loans for such acquisition, construction or

rehabilitation.

(2) The powers granted by this subdivision may be exercised only if:

(a) the commissioner of health has approved any health and health

related facilities which are in addition to the residential unit and

housing portion of the facility, pursuant to section twenty-eight

hundred two of the public health law in any case where the facility is

subject to the provisions of such section or has approved the facility

according to the guidelines prescribed in any other case; (b) with

respect to any portion thereof owned by a for profit owner, the agency

makes the finding required to finance housing developments under

paragraph one of subdivision twenty-nine-a of this section; (c) (i)

obligations of the agency have been issued to fund the loan made or

purchased by the agency and such obligations have received an investment

grade rating from a recognized rating agency, or (ii) the loan made or

purchased by the agency is fully secured as to principal and interest by

insurance or a commitment to insure issued by the state of New York

mortgage agency or by the general credit of a bank, national bank, trust

company, savings bank, savings and loan association, insurance company,

the college construction loan insurance association, the student loan

marketing association, or a governmental agency of the United States;

and (d) approval from the applicable state agencies as to the need for

the project has been obtained prior to joint financing.

31. To and shall develop, promote and ensure that, where possible,

minority groups which traditionally have been disadvantaged, and women

are afforded equal opportunity for contracts in connection with

development and construction contracts for developments, facilities and

projects financed by the issuance of bonds, notes and other obligations

of the agency.

32. To transfer funds in an amount to be agreed upon, at the request

of the director of the division of the budget, to the state treasury for

deposit to the general fund as an expense of the agency. Such transfer

shall be made in such amounts and at such times as specified in an

agreement or agreements executed between the agency and the director of

the budget with copies to be provided to the chairman of the assembly

ways and means committee and the chairman of the senate finance

committee.

§ 44-a — Low rent dwelling accommodations

Low rent dwelling accommodations. 1. Subject to the approval

of the commissioner and to the provisions of any contract with

noteholders and bondholders, the agency shall have the power to lease

dwellings in a project, not to exceed twenty per centum of the dwellings

in such project, from a company, except that in the case of a project

located in an area in which the commissioner finds that unusually

difficult housing conditions exist, the number of dwellings which may be

leased by the agency shall not exceed fifty per centum, and except that

the agency may lease all or any portion of the dwellings in a non-profit

company project designed or intended for occupancy by aged persons, at

such rentals as may be fixed therefor by such company and approved by

the commissioner or the supervising agency, as the case may be, pursuant

to the provisions of subdivision one of section thirty-one of this

chapter less an appropriate adjustment for the increased tax exemption,

if any, attributable to such dwellings pursuant to subdivision two of

section thirty-three of this chapter; and to sublet such dwellings, in

accordance with subdivision two of this section, to persons or families

eligible therefor in accordance with the provisions of paragraph (a) of

subdivision two of section thirty-one of this chapter, except that

dwellings in a non-profit company project designed or intended for

occupancy by the aged shall be sublet only to aged persons, and except

that in the case of mutual companies, dwellings may be leased only when

the agency shall purchase the shares appertaining to such dwellings.

2. The rental of any dwelling sublet in accordance with subdivision

one of this section shall be fixed at an amount equal to twenty per

centum of the probable aggregate annual income of the occupants thereof,

determined in accordance with section thirty-one of this chapter, at the

time of the execution of such sublease and at a time thereafter

proximate to each anniversary date of the execution of such sublease and

at the time of any renewal or extension of such sublease, provided that

no such dwelling shall be sublet (a) at an average rental of less than

fifteen dollars per room per month or at a rental less than that of

comparable dwellings in new state-aided public housing projects in the

community, whichever is greater, or (b) to a person or family whose

probable aggregate annual income exceeds five times the rental fixed

therefor by the company pursuant to subdivision one of section

thirty-one of this chapter, provided however, such person or family may

continue to occupy such dwelling and pay to the agency such fixed

rental, including any surcharges which would otherwise be authorized if

such person or family were a tenant of the company, until the company

shall have entered into a lease with such person or family or until such

person or family has vacated or has been caused to vacate such dwelling.

3. Subject to the approval of the commissioner and to the provisions

of any contract with noteholders and bondholders, the agency shall have

the power to lease dwellings, within areas designated to receive

benefits under the federal demonstration cities and metropolitan

development act of nineteen hundred sixty-six, in a multiple dwelling

receiving benefits and subject to control of its rents under article

eight of this chapter from the owner thereof at such rentals as may be

approved by the governmental agency having jurisdiction pursuant to the

provisions of section four hundred five of this chapter; and to sublet

such dwellings to persons or families eligible therefor in accordance

with the provisions of subdivision three of section four hundred one of

this chapter. The rental of any dwelling sublet pursuant to this

subdivision shall be fixed at an amount equal to twenty per centum of

the probable aggregate annual income of the occupants thereof,

determined in accordance with subdivision three of section four hundred

one of this chapter, at the time of the execution of such sublease and

at the time of each anniversary of the execution of such sublease and at

the time of any renewal or extension of such sublease, provided that no

such dwelling shall be sublet (a) at an average rental of less than

fifteen dollars per room per month or at a rental less than that of

comparable dwellings in new state-aided public housing projects in the

community, whichever is greater, or (b) to a person or family whose

probable aggregate annual income exceeds five times the rental fixed

therefor pursuant to section four hundred five of this chapter.

4. The agency shall create and establish a special account, to be

known as the low rent housing assistance account, and shall pay into

such account all monies appropriated and made available by the state for

the purposes of such account and any other monies which may be made

available to the agency for the purposes of such account from any other

source or sources. All monies held in the low rent housing assistance

accounts shall be used by the agency (a) to meet, together with rentals

received therefor from the occupants, the agency's rent obligation to

the company or owner of a multiple dwelling with respect to dwellings

leased pursuant to this section; (b) to make housing assistance payments

pursuant to subdivision five of this section; (c) for the payment of

administrative and other expenses of the agency allocable to its

activities pursuant to this section, and (d) to reimburse the division

of housing and community renewal the reasonable costs of services

performed by the commissioner of housing and community renewal and the

division of housing and community renewal in carrying out the provisions

of this section pursuant to section fifty-five of this article. Any

monies held in the low rent housing assistance account not required for

immediate disbursement may be invested in the manner permitted by

subdivision eight of section forty-four of this article. Any income or

interest earned by, or increment to such account shall be added to the

monies held in such account for the purposes herein provided.

5. (a) In lieu of leasing and subleasing housing accommodations

pursuant to subdivisions one through three of this section, the agency

may provide housing for persons and families of low income by making

housing assistance payments to the company owning a project.

(b) A housing assistance payment pursuant to this subdivision may be

made only with respect to occupants of a dwelling in a project who would

be eligible for a sublease under the provisions of this section.

(c) Tenants receiving housing assistance payments shall pay a rent to

the company equal to the rent they would pay under a sublease pursuant

to this section. Housing assistance payments equal to the difference

between such rent and the rental fixed for the dwelling pursuant to

section thirty-one of this chapter shall be made by or on behalf of the

agency to the company.

(d) The agency and the division of housing and community renewal may

make such regulations, not inconsistent with the provisions of this

section, and enter into such agreements with the owners of projects as

may be necessary or proper to carry out the provisions of this

subdivision. Such agreements may, in the case of a project the mortgage

on which is held by the agency, provide for the making of housing

assistance payments in the form of a credit against the company's

payments thereon.

§ 44-b — Mortgage modifications, evidence of pre-existing indebtedness

Mortgage modifications, evidence of pre-existing indebtedness.

1. Notwithstanding the provision of any law, general or special, the

agency shall have the power to:

(i) consent to and contract for the modification of any of the terms

of a mortgage, and note or bond secured thereby, made pursuant to this

article for the purpose of obtaining insurance of such mortgage loan by

the federal government in order to refinance all or any part of the

indebtedness evidenced by such mortgage and note or bonds, or

(ii) satisfy such mortgage loan in order to enable the company to

obtain insurance by the federal government of a mortgage loan made for

the purpose of refinancing all or any part of the indebtedness evidenced

by such mortgage and note or bond.

Notwithstanding the provisions hereof, the agency on or after June

fifteen, nineteen hundred seventy-six, shall not modify or satisfy a

mortgage loan, pursuant to this subdivision one, where the principal

amount of the mortgage loan insured by the federal government is less

than eighty-five per centum of the principal amount outstanding on the

original mortgage loan at the time such original mortgage loan is

refinanced, unless such modification or satisfaction is first approved

by the New York state public authorities control board created pursuant

to article one-A of the public authorities law.

2. In the event that the existing mortgage loan is satisfied pursuant

to this section, the agency may in consideration of the issuance of such

satisfaction accept a new mortgage and note or bond insured by the

federal government in an amount equal to the maximum principal amount of

a mortgage loan the federal government will insure or accept the

proceeds available to the housing company as a result of the

refinancing.

3. In the event that there is residual indebtedness, the housing

company shall make and the agency shall accept an instrument evidencing

such indebtedness in such form and upon such terms as the agency may

approve, provided that such terms are not inconsistent with subdivision

two of section twenty of this chapter.

4. Notwithstanding any other provisions of this article where the

commissioner has made the findings required in subdivision one of

section twenty-six and where a project has been approved pursuant to

subdivision five of section twenty-six of this chapter, the agency may

make or contract to make a mortgage loan pursuant to subdivision two or

three of this section without further findings by the commissioner or

further approval by the local legislative body.

5. No company shall accept a mortgage loan to be insured by the

federal government made for the purpose of refinancing the existing

mortgage loan of a company which shall exceed the amount which can be

supported by the income derived from the operation of the project at the

rental rate determined by the commissioner that would be necessary to

meet all necessary payments to be made by the company, of all expenses

including fixed charges, sinking funds, reserves and dividends on

outstanding stock as authorized by the commissioner, if the principal

amount of the original mortgage loan of the company were to be fully

repaid over the term of such mortgage loan by constant and equal

payments of principal and interest and if the interest rate on the

company's original mortgage loan was eight and one-half percent per

annum.

§ 44-c — Federally-aided mortgage loans

Federally-aided mortgage loans. 1. In addition to the powers

of the agency to make mortgage loans to companies organized pursuant to

article two of this chapter and notwithstanding any limitations

contained in such article or in this article in connection with mortgage

loans made to such companies, the agency may make or finance the making

of a federally-aided mortgage loan to the owner of a project upon such

terms and conditions not inconsistent with the provisions of this

section as it shall require, the proceeds of which are substantially to

be used to finance the construction, reconstruction, rehabilitation or

improvement of a project intended to be occupied by three or more

families. A federally-aided mortgage loan made or financed by the agency

shall not exceed an amount equal to the lesser of (i) the maximum

mortgage loan authorized or approved by the federal government or (ii)

one hundred percent of the development cost of the project approved by

the agency.

2. No federally-aided mortgage loan shall be made or financed to a

company organized pursuant to article two of this chapter unless the

commissioner has made the findings required by such article. No

federally-aided mortgage loan shall be made or financed to any other

person, firm, corporation, partnership or association unless (a) the

commissioner finds that (i) the project is consistent with the needs of

the state and the county, city, town or village in which it is located,

or with a plan or undertaking for the clearance, replanning,

reconstruction or rehabilitation of a substandard and insanitary area or

areas, and (ii) the plans and specifications for the project conform to

all applicable federal, state and local laws, ordinances, rules,

regulations or requirements, (in making such finding the commissioner

may rely upon approvals, consents and certifications of governmental

authorities exercising jurisdiction over the project, including the

federal and state government, and any subdivision, agency, bureau, board

or commission thereof), and (b) the agency finds that (i) the estimated

revenues of the project will be sufficient to cover all probable costs

of operations and maintenance, all installments of principal and

interest on the indebtedness relating to the project, taxes, and such

other expenses, including the maintenance of reserves, as may be

projected or required by the agency or the federal government, and (ii)

the project is to be substantially occupied by persons or families of

low-income. In determining whether a project will be substantially

occupied by persons or families of low-income the agency may consider

and rely upon the purpose of the federal program of mortgage insurance,

co-insurance, or housing assistance payments in connection with which

the mortgage loan is made.

3. A company organized pursuant to article two of this chapter which

subsequent to the first day of June, nineteen hundred seventy-nine has

obtained a commitment from the agency to make or finance the making of a

federally-aided mortgage loan and the project of such company shall not

be subject to any restrictions, limitation or procedure imposed by or

pursuant to such article relating to any matter which is the subject of

any restriction, limitation or procedure imposed by or pursuant to any

applicable law, regulation or requirement of the federal government or

agreement entered into pursuant thereto.

4. As used in this section or in connection with a federally-aided

mortgage loan the term project shall mean a specific work or

improvement, whether or not to effectuate all or any part of a plan, and

shall include the lands, buildings and improvements acquired, owned,

constructed, managed or operated to provide dwelling accommodations and

such incidental and appurtenant commercial, recreational and community

facilities as may be approved by the agency.

§ 45 — Transfer of officers and employees

Transfer of officers and employees. Officers and employees of

state departments and agencies may be transferred to the agency and

officers and employees of the agency may be transferred to state

departments and agencies without examination and without loss of any

civil service status or rights. No such transfer may, however, be made

except with the approval of the head of the state department or division

involved and the director of the budget and the chairman of the agency,

and in compliance with the rules and regulations of the civil service

commission of the state.

§ 45-a — Housing trust fund corporation

Housing trust fund corporation. 1. There is hereby established

a public benefit corporation known as the "housing trust fund

corporation" as a subsidiary corporation of the agency.

2. The agency may transfer to such subsidiary corporation any real,

personal or mixed property in order to carry out the purposes of article

eighteen of this chapter. Such subsidiary corporation shall have all the

privileges, immunities, tax exemption and other exemptions of the agency

to the extent the same are not inconsistent with this section.

3. The membership of such subsidiary corporation shall consist of the

members identified pursuant to subdivision one of section forty-three of

this article, and the powers of such subsidiary corporation shall be

vested in and exercised by no less than six of its members thereof then

in office. The subsidiary corporation may delegate to one or more of its

members, or its officers, agents and employees, such powers and duties

as it may deem proper.

3-a. The chairman of the agency may appoint an officer or employee of

the agency to represent him at all meetings of the corporation from

which he may be absent. Any such representative so designated shall have

the power to attend and to vote at any meeting of the corporation from

which the chairman of the agency is absent with the same force and

effect as if the chairman of the agency were present and voting. Such

designation shall be by written notice filed with the chairperson of the

corporation. The designation of such person shall continue until revoked

at any time by written notice to such chairperson. Such designation

shall not be deemed to limit the power of the chairman of the agency to

attend and vote at any meeting of the corporation.

4. No officer or member of the corporation shall receive any

additional compensation, either direct or indirect, other than

reimbursement for actual and necessary expenses incurred in the

performance of his duties, by reason of his serving as a member,

director, or trustee of such subsidiary corporation.

5. Notwithstanding any inconsistent provisions of law, general,

special or local, no officer or employee of the state, or of any civil

division thereof, or any public benefit corporation, shall be deemed to

have forfeited or shall forfeit his office or employment by reason of

his acceptance of membership on the corporation created by this section.

6. The fiscal year of such subsidiary corporation shall begin with the

first day of April of each year and end with the next following

thirty-first day of March.

7. The corporation shall have the power to:

(a) Sue and be sued;

(b) Have a seal and alter the same at pleasure;

(c) Make and alter by-laws for its organization and internal

management and make rules and regulations governing the use of its

property and facilities;

(d) Make and execute contracts and all other instruments necessary or

convenient for the exercise of its powers and functions under this

chapter;

(e) Acquire, hold and dispose of real or personal property for its

corporate purposes;

(f) Engage the services of private consultants on a contract basis for

rendering professional and technical assistance advice;

(g) Procure insurance against any loss in connection with its

activities, properties and other assets, in such amount and from such

insurers as it deems desirable; and

(h) Invest any funds of the corporation, or any other monies under its

custody and control not required for immediate use or disbursement, at

the discretion of the corporation, in obligations of the state or the

United States government or obligations the principal and interest of

which are guaranteed by the state or the United States government, or in

any other obligations in which the comptroller of the state is

authorized to invest pursuant to section ninety-eight of the state

finance law.

8. The corporation will encourage the creation of local housing

partnerships; such partnerships may include but not be limited to

members of the business community, the financial community, housing

developers, builders, not-for-profit organizations and community leaders

who are committed to the development of low income housing within such

community.

9. The corporation will facilitate the coordination of local housing

partnerships and existing state, federal and local programs which

promote the development of low income housing.

10. The corporation is a public housing agency as defined in the

United States housing act of 1937, as amended, and may receive and

administer funds including but not limited to subsidies, loans and fees

made available through federal programs under such act.

(a) The corporation shall be the sole entity with authority in the

state to undertake any statewide or regional multi-state contract for

performance based annual contributions contract administration issued

under authority granted in 42 U.S.C. section 1437f or any replacement

program or contract, whether called an annual contributions contract or

other name, that requires substantially the same administration or

support services offered nationally, regionally or statewide. The

corporation may in its discretion subcontract such activities as it may

require. The division of housing and community renewal shall be the

entity responsible for such statewide or regional multi-state contract

administration with all powers and responsibilities which would

otherwise be available to the corporation in the event the corporation

is unable or unwilling to act as such entity.

(b) The powers vested in the corporation and the division of housing

and community renewal pursuant to paragraph (a) of this subdivision are

coincident to the powers of any municipal or other local public housing

agency or public housing authority operating within the state on the

effective date of this paragraph. The authority of the corporation and

the division of housing and community renewal to operate on a statewide

basis shall not limit the authority of such municipal public housing

agency or local public housing authority to operate, service, administer

or enter into any project based section 8 contract or contracts where

the project is located within a political subdivision of the state in

which such public housing agency or public housing authority was

operating on such effective date.

11. The corporation may do any and all things necessary or convenient

to carry out and exercise the powers given and granted by this section

and article eighteen of this chapter including, but not limited to

contracting with the commissioner of the division of housing and

community renewal to administer any of the provisions of the special

needs housing act of 1988 and articles eighteen and eighteen-A of this

chapter.

12. The division of housing and community renewal and all other state

officers, departments, boards, divisions, commissions, public

authorities and public benefit corporations may render such services to

the corporation within their respective functions as may be requested by

the corporation.

13. Notwithstanding the provisions of article one-A of the public

authorities law, contracts entered into by the corporation pursuant to

articles eighteen and eighteen-A of this chapter shall not be subject to

the provisions of article one-A of the public authorities law.

§ 45-b — Affordable housing corporation

Affordable housing corporation. 1. There is hereby established

a public benefit corporation known as the "affordable housing

corporation" as a subsidiary corporation of the agency.

2. The agency may transfer to such subsidiary corporation any real,

personal or mixed property in order to carry out the purposes of article

nineteen of this chapter. Such subsidiary corporation shall have all the

privileges, immunities, tax exemption and other exemptions of the agency

to the extent the same are not inconsistent with this section.

3. The membership of such subsidiary corporation shall consist of the

members identified pursuant to subdivision one of section forty-three of

this article, and the powers of such subsidiary corporation shall be

vested in and exercised by no less than six of its members thereof then

in office. The subsidiary corporation may delegate to one or more of its

members, or its officers, agents and employees, such powers and duties

as it may deem proper.

3-a. The commissioner of housing and community renewal, the director

of the budget and the commissioner of taxation and finance each may

appoint a person from their respective division or department to

represent such member, respectively, at all meetings of the corporation

from which such member may be absent. Any such representative so

designated shall have the power to attend and to vote at any meeting of

the corporation from which the member so designating him as a

representative is absent with the same force and effect as if the member

designating him were present and voting. Such designation shall be by

written notice filed with the chairman of the corporation by each of the

said members. The designation of such persons shall continue until

revoked at any time by written notice to the chairman by the respective

member making the designation. Such designation shall not be deemed to

limit the power of the appointing member to attend and vote at any

meeting of the corporation.

4. No officer or member of the corporation shall receive any

additional compensation, either direct or indirect, other than

reimbursement for actual and necessary expenses incurred in the

performance of his duties, by reason of his serving as a member,

director, or trustee of such subsidiary corporation.

5. Notwithstanding any inconsistent provisions of law, general,

special or local, no officer or employee of the state, or of any civil

division thereof, or any public benefit corporation, shall be deemed to

have forfeited or shall forfeit his office or employment by reason of

his acceptance of membership on the corporation created by this section.

6. The fiscal year of such subsidiary corporation shall begin with the

first day of April of each year and end with the next following

thirty-first day of March.

7. The corporation shall have the power to:

(a) Sue and be sued;

(b) Have a seal and alter the same at pleasure;

(c) Make and alter by-laws for its organization and internal

management and make rules and regulations governing the use of its

property and facilities;

(d) Make and execute contracts and all other instruments necessary or

convenient for the exercise of its powers and functions under this

chapter;

(e) Acquire, hold and dispose of real or personal property for its

corporate purposes;

(f) Engage the services of private consultants on a contract basis for

rendering professional and technical assistance advice;

(g) Procure insurance against any loss in connection with its

activities, properties and other assets, in such amount and from such

insurers as it deems desirable; and

(h) Invest any funds of the corporation, or any other monies under its

custody and control not required for immediate use or disbursement, at

the discretion of the corporation, in obligations of the state or the

United States government or obligations the principal and interest of

which are guaranteed by the state or the United States government, or in

any other obligations in which the comptroller of the state is

authorized to invest pursuant to section ninety-eight of the state

finance law.

8. The corporation may do any and all things necessary or convenient

to carry out and exercise the powers given and granted by this section

and article nineteen of this chapter including, but not limited to

contracting with the commissioner of the division of housing and

community renewal to administer any of the provisions of article

nineteen of this chapter.

9. The agency and all other state officers, departments, boards,

divisions, commissions, public authorities and public benefit

corporations may render such services to the corporation within their

respective functions as may be requested by the corporation.

10. Notwithstanding the provisions of article one-A of the public

authorities law, contracts entered into by the corporation pursuant to

article nineteen of this chapter shall not be subject to the provisions

of article one-A of the public authorities law.

§ 45-c — Homeless housing and assistance corporation

Homeless housing and assistance corporation. 1. There is

hereby established a public benefit corporation known as the "homeless

housing and assistance corporation" as a subsidiary corporation of the

agency.

2. The agency may transfer to such subsidiary corporation any real,

personal or mixed property in order to carry out the purposes of title

one of article two-A of the social services law. Such subsidiary

corporation shall have all the privileges, immunities, tax exemption and

other exemptions of the agency to the extent the same are not

inconsistent with this section.

3. The membership of such subsidiary corporation shall consist of the

commissioner of social services, who shall also serve as its

chairperson, the chairperson of the agency and one additional member to

be appointed by the chairperson of the homeless housing and assistance

corporation, who shall serve at the pleasure of such chairperson. The

powers of the corporation shall be vested in and exercised by no less

than two of the members thereof then in office. The corporation may

delegate to one or more of its members, or its officers, agents and

employees, such duties and powers as it may deem proper.

3-a. The commissioner of social services, and the chairman of the

agency may each appoint an individual to represent them at all meetings

of the corporation from which they may be absent. Any such

representative so designated shall have the power to attend and to vote

at any meeting of the corporation as if the commissioner of social

services or chairperson of the agency were present and voting. Such

designation shall be by written notice filed with the chairperson of the

corporation. The designation of such person shall continue until revoked

at any time by written notice to such chairperson. Such designation

shall not be deemed to limit the power of the commissioner of social

services or the chairperson of the agency to attend and vote at any

meeting of the corporation.

4. No officer or member of the corporation shall receive any

additional compensation, either direct or indirect, other than

reimbursement for actual and necessary expenses incurred in the

performance of his duties, by reason of his serving as a member,

director, or trustee of such subsidiary corporation.

5. Notwithstanding any inconsistent provisions of law, general,

special or local, no officer or employee of the state, or of any civil

division thereof, or any public benefit corporation, shall be deemed to

have forfeited or shall forfeit his office or employment by reason of

his acceptance of membership on the corporation created by this section.

6. The fiscal year of such subsidiary corporation shall begin with the

first day of April of each year and end with the next following

thirty-first day of March.

7. The corporation shall have the power to:

(a) Sue and be sued;

(b) Have a seal and alter the same at pleasure;

(c) Make and alter by-laws for its organization and internal

management and make rules and regulations governing the use of its

property and facilities;

(d) Make and execute contracts and all other instruments necessary or

convenient for the exercise of its powers and functions under this

chapter;

(e) Acquire, hold and dispose of real or personal property for its

corporate purposes;

(f) Engage the services of private consultants on a contract basis for

rendering professional and technical assistance advice;

(g) Procure insurance against any loss in connection with its

activities, properties and other assets, in such amount and from such

insurance as it deems desirable; and

(h) Invest any funds of the corporation, or any other monies under its

custody and control not required for immediate use or disbursement, at

the discretion of the corporation, in obligations of the state or the

United States government or obligations the principal and interest of

which are obligations in which the comptroller of the state is

authorized to invest pursuant to section ninety-eight of the state

finance law.

8. The corporation may do any and all things necessary or convenient

to carry out and exercise the powers given and granted by this section

and title one of article two-A of the social services law including, but

not limited to contracting with the commissioner of social services to

administer any of the provisions of title one of article two-A of the

social services law.

9. The agency and all other state officers, departments, boards,

divisions, commissions, public authorities and public benefit

corporations may render such services to the corporation within their

respective functions as may be requested by the corporation.

10. Notwithstanding the provisions of article one-A of the public

authorities law, contracts entered into by the corporation pursuant to

title one of article two-A of the social services law shall not be

subject to the provisions of article one-A of the public authorities

law.

§ 46 — Notes and bonds of the agency

Notes and bonds of the agency. 1. (a) Subject to the provisions

of section forty-seven of this article, the agency shall have power and

is hereby authorized from time to time to issue its negotiable bonds and

notes in conformity with applicable provisions of the uniform commercial

code in such principal amount as, in the opinion of the agency, shall be

necessary to provide sufficient funds for achieving its corporate

purposes, including the making or financing the making of mortgage

loans, the payment of interest on bonds and notes of the agency,

establishment of reserves to secure such bonds and notes, and all other

expenditures of the agency incident to and necessary or convenient to

carry out its corporate purposes and powers;

(b) The agency shall have power, from time to time, to issue renewal

notes, to issue bonds to pay notes and whenever it deem refunding

expedient, to refund any bonds by the issuance of new bonds, whether the

bonds to be refunded have or have not matured, and to issue bonds partly

to refund bonds then outstanding and partly for any other purpose. The

refunding bonds shall be sold and the proceeds applied to the purchase,

redemption or payment of the bonds to be refunded;

(c) Except as may otherwise be expressly provided by the agency, every

issue of its notes or bonds shall be general obligations of the agency

payable out of any revenues or monies of the agency, subject only to any

agreements with the holders of particular notes or bonds pledging any

particular receipts or revenues;

2. a. The notes and bonds, except as provided in paragraph (c) of

subdivision four of this section, shall be authorized by resolution of

the members, shall bear such date or dates, and shall mature at such

time or times, in the case of any such note, or any renewals thereof,

issued for achieving its corporate purposes other than the making or

financing the making of mortgage loans, not exceeding the term of any

applicable lease or sublease, and in the case of any such note, or any

renewals thereof, issued for the purpose of making or financing the

making of mortgage loans, not exceeding the term for the repayment of

the mortgage loan or the federally guaranteed securities acquired to

finance such mortgage loan, and in the case of any such bond not

exceeding fifty years from the date of issue, as such resolution or

resolutions may provide.

b. In no event, however, shall any such note mature, in the case of a

note or any renewals thereof, issued for the purpose of achieving its

corporate purposes other than the making or financing the making of

mortgage loans, later than eight years from the date of issue of such

original note, and, in the case of a note or any renewals thereof,

issued for the purpose of making or financing the making of mortgage

loans, later than ten years from the date of issue of such original

note, unless in each year at least that amount of principal is required

to be paid as would be required if (i) the principal of and interest on

any such note were payable in such manner that the total annual charges

required for the payment of principal and interest were approximately

equal and constant for the period of such lease, sublease or mortgage,

as the case may be, and (ii) at the expiration of the term of such

lease, sublease or mortgage, the total of such required payments were

sufficient to pay the full principal amount of such note; provided

however, that such manner of payment of principal shall be required only

from the date of the issuance of such note or from the commencement of

the lease or sublease term in the case of a lease or sublease and from

the occupancy date in the case of a mortgage whichever later occurs.

Such payment of principal may be made either to the holder of such note

or into a sinking fund. Notwithstanding the foregoing, no such note

shall be issued pursuant to this paragraph b unless the state director

of the budget has approved the issuance of any such note in writing

prior to such issuance.

c. The notes and bonds shall bear interest at such rate or rates, be

in such denominations, be in such form, either coupon or registered,

carry such registration privileges, be executed in such manner, be

payable in such medium of payment, at such place or places and be

subject to such terms of redemption as such resolution or resolutions

may provide. The notes and bonds of the agency may be sold by the

agency, at public or private sale, at such price or prices as the agency

shall determine. No notes or bonds of the agency may be sold by the

agency at private sale, however, unless such sale and the terms thereof

have been approved in writing by (a) the comptroller, where such sale is

not to the comptroller, or (b) the director of the budget, where such

sale is to the comptroller.

3. Except as provided in paragraph (d) of subdivision four of this

section, any resolution or resolutions authorizing any notes or bonds or

any issue thereof may contain provisions, which shall be a part of the

contract with the holders thereof, as to:

(a) pledging all or any part of the fees and charges made or received

by the agency, and all or any part of the monies received in payment of

mortgage loans or the federally guaranteed securities acquired to

finance such mortgage loans and interest thereon, and other monies

received or to be received, to secure the payment of the notes or bonds

or of any issue thereof, subject to such agreements with bondholders or

noteholders as may then exist;

(b) pledging all or any part of the assets of the agency, including

mortgages or the federally guaranteed securities acquired to finance

such mortgage loans and obligations securing the same, to secure the

payment of the notes or bonds or of any issue of notes or bonds, subject

to such agreements with noteholders or bondholders as may then exist;

(c) the use and disposition of the gross income from mortgages owned

or financed by the agency and payment of principal of mortgages owned by

the agency;

(d) the setting aside of reserves or sinking funds and the regulation

and disposition thereof;

(e) limitations on the purpose to which the proceeds of sale of notes

or bonds may be applied and pledging such proceeds to secure the payment

of the notes or bonds or of any issue thereof;

(f) limitations on the issuance of additional notes or bonds; the

terms upon which additional notes or bonds may be issued and secured;

the refunding of outstanding or other notes or bonds;

(g) the procedure, if any, by which the terms of any contract with

noteholders or bondholders may be amended or abrogated, the amount of

notes or bonds the holders of which must consent thereto, and the manner

in which such consent may be given;

(h) limitations on the amount of monies to be expended by the agency

for operating, administrative or other expenses of the agency;

(i) vesting in a trustee or trustees such property, rights, powers and

duties in trust as the agency may determine, which may include any or

all of the rights, powers and duties of the trustee appointed by the

bondholders pursuant to this article, and limiting or abrogating the

right of the bondholders to appoint a trustee under this article or

limiting the rights, powers and duties of such trustee;

(j) any other matters, of like or different character, which in any

way affect the security or protection of the notes or bonds.

4. (a) Subject to the provisions of subdivisions three and four of

section forty-seven of this article and notwithstanding anything to the

contrary hereinabove provided in this section, the agency shall have

power and is hereby authorized from time to time to issue negotiable

bonds and notes in such principal amount, as, in the opinion of the

agency, shall be necessary to provide sufficient funds for the making of

equity loans, the payment of interest on bonds and notes issued to

provide funds for the making of such equity loans, the establishment of

reserves to secure such bonds and notes, and all other expenditures of

the agency incident to and necessary or convenient for the making of

such equity loans;

(b) The provisions of paragraphs (b), (c) and (d) of subdivision one

of this section shall apply to equity notes and bonds issued by the

agency for the making of equity loans.

(c) The provisions of subdivision two of this section shall apply to

equity notes and bonds issued by the agency for the making of equity

loans except that any such equity notes, or any renewals thereof, and

any such equity bond shall mature at such time or times as the

resolution of the members shall provide, but in no event at a time

subsequent to six months after the latest maturity date of the last

maturing equity loan made from the proceeds of such equity notes or

bonds.

(d) Any resolution or resolutions authorizing any equity notes or

equity bonds or any issue thereof for the making of equity loans may

contain any of the provisions set forth in subdivision three of this

section, which shall be a part of the contract with the holders thereof,

except that no such resolution or resolutions shall pledge any fees or

charges collected by the agency pursuant to subdivision eleven of

section forty-four, income from mortgages owned by the agency, or any

payments of principal of mortgages owned by the agency.

5. It is the intention hereof that any pledge made by the agency shall

be valid and binding from the time when the pledge is made; that the

monies or property so pledged and thereafter received by the agency

shall immediately be subject to the lien of such pledge without any

physical delivery thereof or further act; and that the lien of any such

pledge shall be valid and binding as against all parties having claims

of any kind in tort, contract or otherwise against the agency,

irrespective of whether such parties have notice thereof. Neither the

resolution nor any other instrument by which a pledge is created need be

recorded.

6. Neither the members of the agency nor any person executing the

notes or bonds shall be liable personally on the notes or bonds or be

subject to any personal liability or accountability by reason of the

issuance thereof.

7. The agency, subject to such agreements with noteholders or

bondholders as may then exist, shall have power out of any funds

available therefor to purchase notes or bonds of the agency, which shall

thereupon be cancelled, at a price not exceeding (a) if the notes or

bonds are then redeemable, the redemption price then applicable plus

accrued interest to the next interest payment date thereon, or (b) if

the notes or bonds are not then redeemable, the redemption price

applicable on the first date after such purchase upon which the notes or

bonds become subject to redemption plus accrued interest to such date.

8. The state shall not be liable on notes or bonds of the agency and

such notes and bonds shall not be a debt of the state, and such notes

and bonds shall contain on the face thereof a statement to such effect.

§ 47 — Reserve funds and appropriations

Reserve funds and appropriations. 1. (a) The agency shall create

and establish a special fund (herein referred to as capital reserve

fund), and shall pay into such capital reserve fund (1) any monies

appropriated and made available by the state for the purposes of such

fund, (2) any proceeds of sale of notes or bonds other than state

university construction notes or state university construction bonds,

equity notes or equity bonds, non-profit project notes or non-profit

project bonds, hospital and nursing home project notes or hospital and

nursing home project bonds, urban rental project notes or urban rental

project bonds, health facilities notes or health facilities bonds, youth

facilities project notes or youth facilities project bonds, community

mental health services and developmental disabilities services project

notes or community mental health services and developmental disabilities

services project bonds, community senior citizens services project notes

or community senior citizens services project bonds, mental hygiene

improvement notes or mental hygiene improvement bonds and revenue

housing bonds, and bonds and notes for the housing program to the extent

provided in the resolution of the agency authorizing the issuance

thereof, and (3) any other moneys which may be made available to the

agency for the purpose of such fund from any other source or sources.

All moneys held in the capital reserve fund, except as hereinafter

provided, shall be used solely for the payment of the principal of bonds

of the agency other than state university construction bonds, equity

bonds, non-profit project bonds, hospital and nursing home project

bonds, urban rental project bonds, health facilities bonds, youth

facilities project bonds, community mental health services and

developmental disabilities services project bonds, community senior

citizens services project bonds, mental hygiene improvement bonds and

revenue housing bonds, and bonds and notes for the housing program as

the same mature, required payments to any sinking fund established in a

resolution of the agency for the amortization of term bonds (hereinafter

referred to as "sinking fund payments"), the purchase or redemption of

bonds of the agency other than state university construction bonds,

equity bonds, non-profit project bonds, hospital and nursing home

project bonds, urban rental project bonds, health facilities bonds,

youth facilities project bonds, community mental health services and

developmental disabilities services project bonds, community senior

citizens services project bonds, mental hygiene improvement bonds and

revenue housing bonds, and bonds and notes for the housing program the

payment of interest on such bonds of the agency or the payment of any

redemption premium required to be paid when such bonds are redeemed

prior to maturity; provided, however, that monies in such fund shall not

be withdrawn therefrom at any time in such amount as would reduce the

amount of such fund to less than the maximum amount of principal and

interest maturing and becoming due and sinking fund payments required to

be made in any succeeding calendar year on all bonds of the agency then

outstanding other than state university construction bonds, equity

bonds, non-profit project bonds, hospital and nursing home project

bonds, urban rental project bonds, health facilities bonds, youth

facilities project bonds, community mental health services and

developmental disabilities services project bonds, community senior

citizens services project bonds, mental hygiene improvement bonds and

revenue housing bonds and bonds and notes for the housing program,

except for the purpose of paying principal of, interest and sinking fund

payments becoming due on such bonds of the agency maturing and becoming

due and for the payment of which other moneys of the agency are not

available. For the purposes of this subdivision, in computing the

maximum amount of principal maturing at a single future date (herein

called "term bonds") in any succeeding calendar year, the principal

amount of any such term bonds which are subject to mandatory redemption

prior to such future date by sinking fund payments shall not be included

in the computation determining the maximum amount of principal maturing

in said future year. Any income or interest earned by, or increment to,

the capital reserve fund due to the investment thereof may be

transferred by the agency to the general reserve fund or other fund of

the agency to the extent it does not reduce the amount of the capital

reserve fund below the maximum amount of principal and interest maturing

and becoming due and sinking fund payments required to be made in any

succeeding calendar year on all such bonds of the agency then

outstanding other than state university construction bonds, equity

bonds, non-profit project bonds, hospital and nursing home project

bonds, urban rental project bonds, health facilities bonds, youth

facilities project bonds, community mental health services and

developmental disabilities services project bonds, community senior

citizens services project bonds, mental hygiene improvement bonds and

revenue housing bonds and bonds and notes for the housing program.

(b) The agency shall not issue bonds other than state university

construction bonds, equity bonds, non-profit project bonds, hospital and

nursing home project bonds, urban rental project bonds, health

facilities bonds, youth facilities project bonds, community mental

health services and developmental disabilities services project bonds,

community senior citizens services project bonds, mental hygiene

improvement bonds and revenue housing bonds and bonds and notes for the

housing program at any time secured by the capital reserve fund if the

maximum amount of principal and interest maturing and becoming due and

sinking fund payments required to be made in a succeeding calendar year

on such bonds then to be issued and on all other bonds of the agency

then outstanding other than state university construction bonds, equity

bonds, non-profit project bonds, hospital and nursing home project

bonds, urban rental project bonds, health facilities bonds, youth

facilities project bonds, community mental health services and

developmental disabilities services project bonds, community senior

citizens services project bonds, mental hygiene improvement bonds and

revenue housing bonds and bonds and notes for the housing program will

exceed the amount of the capital reserve fund at the time of issuance

unless the agency, at the time of issuance of such bonds, shall deposit

in such fund from the proceeds of the bonds so to be issued, or

otherwise, an amount which, together with the amount then in such fund,

will be not less than the maximum amount of principal and interest

maturing and becoming due and sinking fund payments required to be made

in any succeeding calendar year on such bonds then to be issued and on

all other bonds of the agency then outstanding other than state

university construction bonds, equity bonds, non-profit project bonds,

hospital and nursing home project bonds, urban rental project bonds,

health facilities bonds, youth facilities project bonds, community

mental health services and developmental disabilities services project

bonds, community senior citizens services project bonds, mental hygiene

improvement bonds and revenue housing bonds and bonds and notes for the

housing program.

(c) The agency shall not issue bonds and notes other than state

university construction bonds and state university construction notes,

hospital and nursing home project bonds and hospital and nursing home

project notes, health facilities bonds and health facilities notes,

youth facilities project bonds and youth facilities project notes,

community mental health services and developmental disabilities services

project bonds and community mental health services and developmental

disabilities services project notes, community senior citizens services

project notes or community senior citizens services project bonds and

mental hygiene improvement bonds and mental hygiene improvement notes

and bonds and notes for the housing program for any of its corporate

purposes in an aggregate principal amount exceeding thirty-six billion

two hundred eighty million dollars, excluding bonds and notes issued to

refund outstanding bonds and notes.

(d) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article, provision is

made in paragraph (a) of this subdivision for the accumulation in the

capital reserve fund of an amount equal to the maximum amount of

principal and interest maturing and becoming due and sinking fund

payments required to be made in any succeeding calendar year on all

bonds of the agency then outstanding other than state university

construction bonds, equity bonds, non-profit project bonds, hospital and

nursing home project bonds, urban rental project bonds, health

facilities bonds, youth facilities project bonds, community mental

health services and developmental disabilities services project bonds,

community senior citizens services project bonds, mental hygiene

improvement bonds and revenue housing bonds and bonds and notes for the

housing program. In order further to assure such maintenance of the

capital reserve fund, there shall be annually apportioned and paid to

the agency for deposit in the capital reserve fund such sum, if any, as

shall be certified by the chairman of the agency to the governor and

director of the budget as necessary to restore the capital reserve fund

to an amount equal to the maximum amount of principal and interest

maturing and becoming due and sinking fund payments required to be made

in any succeeding calendar year on the bonds of the agency then

outstanding other than state university construction bonds, equity

bonds, non-profit project bonds, hospital and nursing home project

bonds, urban rental project bonds, health facilities bonds, youth

facilities project bonds, community mental health services and

developmental disabilities services project bonds, community senior

citizens services project bonds, mental hygiene improvement bonds and

revenue housing bonds and bonds and notes for the housing program. The

chairman of the agency shall annually, on or before December first, make

and deliver to the governor and director of the budget his certificate

stating the amount, if any, required to restore the capital reserve fund

to the amount aforesaid and the amount so stated, if any, shall be

apportioned and paid to the agency during the then current state fiscal

year. The principal amount of bonds secured by the capital reserve fund

to which state funds are apportionable pursuant to this paragraph shall

be limited to the total amount of bonds and notes outstanding on the

effective date of this act, plus the total amount of bonds and notes

contracted after the effective date of this act to finance projects in

progress on the effective date of this act as determined by the New York

state public authorities control board created pursuant to section fifty

of the public authorities law whose affirmative determination shall be

conclusive as to all matters of law and fact solely for the purposes of

the limitations contained in this paragraph, but in no event shall the

total amount of bonds so secured by such a capital reserve fund or funds

exceed three hundred thirty-eight million dollars, excluding bonds

issued to refund such outstanding bonds until the date of redemption of

such outstanding bonds. As outstanding bonds so secured are paid, the

amount so secured shall be reduced accordingly but the redemption of

such outstanding bonds from the proceeds of refunding bonds shall not

reduce the amount so secured.

(e) In computing the amount of the capital reserve fund for the

purposes of this section, securities in which all or a portion of such

fund shall be invested shall be valued at par or if purchased at less

than par, at their cost to the agency.

2. The agency shall create and establish a special fund (herein

referred to as general reserve fund) and shall pay into such fund all

fees and charges collected by the agency pursuant to paragraph (a) of

subdivision eleven of section forty-four of this article, or otherwise,

other than fees and charges collected in connection with the making of

mortgage loans (or commitments therefor) to mutual companies, non-profit

companies, urban rental companies or community development corporations,

and any monies which the agency shall transfer from the capital reserve

fund pursuant to the provisions of paragraph (a) of subdivision one of

this section. Such monies and any other monies paid into the general

reserve fund may, in the discretion of the agency but subject to

agreements with bondholders and noteholders, be used by the agency (a)

for the repayment of advances from the state in accordance with the

provisions of repayment agreements between the agency and the director

of the budget, (b) to reimburse the division of housing and community

renewal the reasonable costs of the services performed by the

commissioner of housing and community renewal and division of housing

and community renewal pursuant to section fifty-five of this article,

(c) to pay all costs, expenses and charges of financing, including fees

and expenses of trustees and paying agents, (d) for transfers to the

capital reserve fund, (e) for the payment of the principal of and

interest on bonds or notes other than state university construction

bonds or state university construction notes, equity bonds or equity

notes, non-profit project bonds or non-profit project notes, hospital

and nursing home project bonds or hospital and nursing home project

notes, urban rental project bonds or urban rental project notes, health

facilities bonds or health facilities notes, youth facilities project

bonds or youth facilities project notes, community mental health

services and developmental disabilities services project bonds or

community mental health services and developmental disabilities services

project notes, community senior citizens services project notes or

community senior citizens services project bonds, mental hygiene

improvement bonds or mental hygiene improvement notes and revenue

housing bonds and bonds and notes for the housing program issued by the

agency when the same shall become due whether at maturity or on call for

redemption and for the payment of any redemption premium required to be

paid where such bonds or notes are redeemed prior to their stated

maturities, and to purchase bonds or notes other than state university

construction bonds or state university construction notes, equity bonds

or equity notes, non-profit project bonds or non-profit project notes,

hospital and nursing home project bonds or hospital and nursing home

project notes, urban rental project bonds or urban rental project notes,

health facilities bonds or health facilities notes, youth facilities

project bonds or youth facilities project notes, community mental health

services and developmental disabilities services project bonds or

community mental health services and developmental disabilities services

project notes, community senior citizens services project notes or

community senior citizens services project bonds, mental hygiene

improvement bonds or mental hygiene improvement notes and revenue

housing bonds and bonds and notes for the housing program issued by the

agency, or (f) for such other corporate purposes of the agency as the

agency in its discretion shall determine and provide.

3. (a) The agency shall create and establish a special fund (herein

referred to as equity reserve fund), and shall pay into such equity

reserve fund (1) any monies appropriated and made available by the state

for the purposes of such fund, (2) any proceeds of sale of equity notes

or equity bonds, to the extent provided in the resolution of the agency

authorizing the issuance thereof, and (3) any other monies which may be

made available to the agency for the purpose of such fund from any other

source or sources. All moneys held in the equity reserve fund, except as

hereinafter provided, shall be used solely for the payment of the

principal of equity bonds of the agency, as the same mature, the

purchase of equity bonds of the agency, the payment of interest on

equity bonds of the agency or the payment of any redemption premium

required to be paid when such bonds are redeemed prior to maturity;

provided, however, that moneys in such fund shall not be withdrawn

therefrom at any time in such amount as would reduce the amount of such

fund to less than the maximum amount of principal and interest maturing

and becoming due in any succeeding calendar year on all equity bonds of

the agency then outstanding, except for the purpose of paying principal

and interest on equity bonds of the agency maturing and becoming due and

for the payment of which other monies of the agency are not available.

Any income or interest earned by, or increment to, the equity reserve

fund due to the investment thereof may be transferred to the equity loan

fund or other fund of the agency to the extent it does not reduce the

amount of the equity reserve fund below the maximum amount of principal

and interest maturing and becoming due in any succeeding calendar year

on all equity bonds of the agency then outstanding.

(b) The agency shall not issue equity bonds at any time secured by the

equity reserve fund if the maximum amount of principal and interest

maturing and becoming due in a succeeding calendar year on the equity

bonds then to be issued and on all other equity bonds of the agency then

outstanding will exceed the amount of the equity reserve fund at the

time of issuance, unless the agency, at the time of issuance of such

bonds, shall deposit in such fund from the proceeds of the bonds so to

be issued, or otherwise, an amount which together with the amount then

in such fund, will be not less than the maximum amount of principal and

interest maturing and becoming due in any succeeding calendar year on

the equity bonds then to be issued and on all other equity bonds of the

agency then outstanding.

(c) The agency shall not issue equity bonds and equity notes in an

aggregate principal amount exceeding fifty million dollars, excluding

equity bonds and notes issued to refund outstanding equity bonds and

notes.

(d) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article, provision is

made in paragraph (a) of this subdivision for the accumulation in the

equity reserve fund of an amount equal to the maximum amount of

principal and interest maturing and becoming due in any succeeding

calendar year on all equity bonds of the agency then outstanding. In

order further to assure such maintenance of the equity reserve fund,

there shall be annually apportioned and paid to the agency for deposit

in the equity reserve fund such sum, if any, as shall be certified by

the chairman of the agency to the governor and director of the budget as

necessary to restore the equity reserve fund to an amount equal to the

maximum amount of principal and interest maturing and becoming due in

any succeeding calendar year on the equity bonds of the agency then

outstanding. The chairman of the agency shall annually, on or before

December first, make and deliver to the governor and director of the

budget his certificate stating the amount, if any, required to restore

the equity reserve fund to the amount aforesaid and the amount so

stated, if any, shall be apportioned and paid to the agency during the

then current state fiscal year. The principal amount of bonds secured by

the equity reserve fund to which state funds are apportionable pursuant

to this paragraph shall be limited to the total amount of bonds and

notes outstanding on the effective date of this act, plus the total

amount of bonds and notes contracted after the effective date of this

act to finance projects in progress on the effective date of this act,

as determined by the New York state public authorities control board

created pursuant to section fifty of the public authorities law whose

affirmative determination shall be conclusive as to all matters of law

and fact solely for the purposes of the limitations contained in this

paragraph, but in no event shall the total amount of bonds so secured by

such a equity reserve fund or funds exceed three hundred fifteen

thousand dollars, excluding bonds issued to refund such outstanding

bonds until the date of redemption of such outstanding bonds. As

outstanding bonds so secured are paid, the amount so secured shall be

reduced accordingly but the redemption of such outstanding bonds from

the proceeds of refunding bonds shall not reduce the amount so secured.

(e) In computing the amount of the equity reserve fund for the

purposes of this section, securities in which all or a portion of such

fund shall be invested shall be valued at par if purchased at par, or if

purchased at other than par, at amortized value.

4. The agency shall create and establish a special fund (herein

referred to as equity loan fund) and shall pay into such fund any monies

which the agency shall transfer from the equity reserve fund pursuant to

the provisions of paragraph (a) of subdivision three of this section and

any monies received in payment of principal of or interest on equity

loans. Such monies and any other monies paid into the equity loan fund

may, in the discretion of the agency, but subject to agreements with the

holders of equity bonds and equity notes be used by the agency (a) for

the repayment of advances from the state in accordance with the

provisions of repayment agreements between the agency and the director

of the budget, (b) to reimburse the division of housing the reasonable

costs of the services performed by the commissioner of housing and

division of housing pursuant to section fifty-five of this article, (c)

to pay all costs, expenses and charges of financing equity loans,

including fees and expenses of trustees and paying agents, (d) for

transfers to the equity reserve fund, (e) for the payment of the

principal of and interest on equity bonds or equity notes issued by the

agency when the same shall become due whether at maturity or on call for

redemption and for the payment of any redemption premium required to be

paid where such bonds or notes are redeemed prior to their stated

maturities, and to purchase equity bonds or equity notes issued by the

agency, or (f) for such other corporate purposes of the agency as the

agency in its discretion shall determine and provide.

5. (a) The agency may create and establish one or more additional

reserve funds to be known as debt service reserve funds and may pay into

such reserve funds (1) any moneys appropriated and made available by the

state for the purposes of such funds, (2) any proceeds of sale of

non-profit project notes or non-profit project bonds, to the extent

provided in the resolution of the agency authorizing the issuance

thereof, and (3) any other moneys which may be made available to the

agency for the purposes of such funds from any other source or sources.

The moneys held in or credited to any debt service reserve fund

established under this subdivision except as hereinafter provided, shall

be used solely for the payment of the principal of non-profit project

bonds of the agency secured by such reserve fund, as the same mature,

required payments to any sinking fund established in a resolution of the

agency for the amortization of term bonds (hereinafter referred to as

"sinking fund payments"), the purchase or redemption of such non-profit

project bonds of the agency, the payment of interest on such non-profit

project bonds of the agency or the payment of any redemption premium

required to be paid when such bonds are redeemed prior to maturity;

provided, however, that moneys in any such fund shall not be withdrawn

therefrom at any time in such amount as would reduce the amount of such

fund to less than the maximum amount of principal, interest maturing and

becoming due and sinking fund payments required to be made in any

succeeding calendar year on the non-profit project bonds of the agency

then outstanding and secured by such reserve fund, except for the

purpose of paying principal and interest and sinking fund payments

becoming due on the non-profit project bonds of the agency secured by

such reserve fund maturing and becoming due and for the payment of which

other moneys of the agency are not available. For the purposes of this

subdivision five, in computing the maximum amount of principal maturing

at a single future date (herein called "term bonds") in any succeeding

calendar year, the principal amount of any such term bonds which are

subject to mandatory redemption prior to such future date by sinking

fund payments shall not be included in the computation determining the

maximum amount of principal maturing in said future year. Any income or

interest earned by, or increment to, any such debt service reserve fund

due to the investment thereof may be transferred to any other fund or

account of the agency to the extent it does not reduce the amount of

such debt service reserve fund below the maximum amount of principal and

interest maturing and becoming due and sinking fund payments required to

be made in any succeeding calendar year on all non-profit project bonds

of the agency then outstanding and secured by such reserve fund.

(b) The agency shall not issue non-profit project bonds at any time if

the maximum amount of principal and interest maturing and becoming due

and sinking fund payments required to be made in a succeeding calendar

year on the non-profit project bonds outstanding and then to be issued

and secured by a debt service reserve fund will exceed the amount of

such reserve account at the time of issuance, unless the agency, at the

time of issuance of such bonds, shall deposit in such reserve fund from

the proceeds of the bonds so to be issued, or otherwise, an amount which

together with the amount then in such reserve fund, will be not less

than the maximum amount of principal and interest maturing and becoming

due and sinking fund payments required to be made in any succeeding

calendar year on the non-profit project bonds then to be issued and on

all other non-profit project bonds of the agency then outstanding and

secured by such reserve fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article provision is

made in paragraph (a) of this subdivision for the accumulation in each

debt service reserve fund of an amount equal to the maximum amount of

principal and interest maturing and becoming due and sinking fund

payments required to be made in any succeeding calendar year on all

non-profit project bonds of the agency then outstanding and secured by

such reserve fund. In order further to assure the maintenance of such

debt service reserve funds, there shall be annually apportioned and paid

to the agency for deposit in each debt service reserve fund such sum, if

any, as shall be certified by the chairman of the agency to the governor

and director of the budget as necessary to restore such reserve fund to

an amount equal to the maximum amount of principal and interest maturing

and becoming due and sinking fund payments required to be made in any

succeeding calendar year on the non-profit project bonds of the agency

then outstanding and secured by such reserve fund. The chairman of the

agency shall annually, on or before December first, make and deliver to

the governor and director of the budget his certificate stating the sum,

if any, required to restore each such debt service reserve fund to the

amount aforesaid, and the sum or sums so certified, if any, shall be

apportioned and paid to the agency during the then current state fiscal

year. The principal amount of bonds secured by a debt service reserve

fund or funds to which state funds are apportionable pursuant to this

paragraph shall be limited to the total amount of bonds and notes

outstanding on the effective date of this act, plus the total amount of

bonds and notes contracted after the effective date of this act to

finance projects in progress on the effective date of this act as

determined by the New York state public authorities control board

created pursuant to section fifty of the public authorities law whose

affirmative determination shall be conclusive as to all matters of law

and fact solely for the purpose of the limitations contained in this

paragraph, but in no event shall the total amount of bonds so secured by

such a debt service reserve fund or funds exceed seven hundred

ninety-three million dollars, excluding bonds issued to refund such

outstanding bonds until the date of redemption of such outstanding

bonds. As outstanding bonds so secured are paid, the amount so secured

shall be reduced accordingly but the redemption of such outstanding

bonds from the proceeds of refunding bonds shall not reduce the amount

so secured.

(d) In computing any debt service reserve fund for the purposes of

this section, securities in which all or a portion of such reserve fund

shall be invested shall be valued at par, or if purchased at less than

par, at their cost to the agency.

6. (a) The agency may create and establish a special fund to be known

as hospital and nursing home capital reserve fund and may pay into such

reserve funds (1) any monies appropriated and made available by the

state for the purposes of such funds, (2) any proceeds of sale of

hospital and nursing home project notes or hospital and nursing home

project bonds, to the extent provided in the resolution of the agency

authorizing the issuance thereof, and (3) any other monies which may be

made available to the agency for the purposes of such accounts from any

other source or sources. The monies held in or credited to the capital

reserve fund established under this subdivision except as hereinafter

provided, shall be used solely for the payment of the principal of

hospital and nursing home project bonds of the agency secured by such

reserve fund, as the same mature, required payments to any sinking fund

established in a resolution of the agency for the amortization of term

bonds (hereinafter referred to as "sinking fund payments") the purchase

or redemption of such hospital and nursing home project bonds of the

agency, the payment of interest on such hospital and nursing home

project bonds of the agency, or the payment of any redemption premium

required to be paid when such bonds are redeemed prior to maturity;

provided, however, that monies in any such fund shall not be withdrawn

therefrom at any time in such amount as would reduce the amount of such

fund to less than the maximum amount of principal and interest maturing

and becoming due and sinking fund payments required to be made in any

succeeding calendar year on the hospital and nursing home project bonds

of the agency then outstanding and secured by such reserve fund, except

for the purpose of paying principal, interest on hospital and nursing

home project bonds of the agency secured by such reserve fund maturing

and becoming due and sinking fund payments becoming due and for the

payment of which other monies of the agency are not available. For the

purposes of this subdivision six, in computing the maximum amount of

principal maturing at a single future date (herein called "term bonds")

in any succeeding calendar year, the principal amount of any such term

bonds which are subject to mandatory redemption prior to such future

date by sinking fund payments shall not be included in the computation

determining the maximum amount of principal maturing in said future

year. Any income or interest earned by, or increment to, any such

hospital and nursing home capital reserve fund due to the investment

thereof may be transferred to the hospital and nursing home general

reserve fund or other fund of the agency, to the extent it does not

reduce the amount of such hospital and nursing home capital reserve fund

below the maximum amount of principal and interest maturing and becoming

due and sinking fund payments required to be made in any succeeding

calendar year on all hospital and nursing home project bonds of the

agency then outstanding and secured by such reserve fund.

(b) The agency shall not issue hospital and nursing home project bonds

and notes in an aggregate principal amount exceeding one billion nine

hundred fifty million dollars excluding hospital and nursing home

project bonds and hospital and nursing home project notes issued to

refund outstanding hospital and nursing home project bonds and hospital

and nursing home project notes, nor shall it issue hospital and nursing

home project bonds at any time secured by the hospital and nursing home

capital reserve fund if the maximum amount of principal and interest

maturing and becoming due and sinking fund payments required to be made

in a succeeding calendar year on the hospital and nursing home project

bonds outstanding and then to be issued and secured by the hospital and

nursing home capital reserve fund will exceed the amount of such reserve

fund at the time of issuance, unless the agency, at the time of issuance

of such bonds, shall deposit in such reserve fund from the proceeds of

the bonds so to be issued, or otherwise, an amount which together with

the amount then in such reserve fund, will be not less than the maximum

amount of principal and interest maturing and becoming due and sinking

fund payments required to be made in any succeeding calendar year on the

hospital and nursing home project bonds then to be issued and on all

other hospital and nursing home project bonds of the agency then

outstanding and secured by such reserve fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article provision is

made in paragraph (a) of this subdivision for the accumulation in the

hospital and nursing home capital reserve fund of an amount equal to the

maximum amount of principal and interest maturing and becoming due and

sinking fund payments to be made in any succeeding calendar year on all

hospital and nursing home project bonds of the agency then outstanding

and secured by such reserve fund. In order further to assure the

maintenance of such hospital and nursing home capital reserve fund,

there shall be annually apportioned and paid to the agency for deposit

in such hospital and nursing home capital reserve fund such sum, if any,

as shall be certified by the chairman of the agency to the governor and

director of the budget as necessary to restore such reserve fund to an

amount equal to the maximum amount of principal and interest maturing

and becoming due and sinking fund payments required to be made in any

succeeding calendar year on the hospital and nursing home project bonds

of the agency then outstanding and secured by such reserve fund. The

chairman of the agency shall annually, on or before December first, make

and deliver to the governor and director of the budget his certificate

stating the sums, if any, required to restore such hospital and nursing

home capital reserve fund to the amount aforesaid, and the sums so

certified, if any, shall be apportioned and paid to the agency during

the then current state fiscal year. The principal amount of bonds

secured by the hospital and nursing home capital reserve fund to which

state funds are apportionable pursuant to this paragraph shall be

limited to the total amount of bonds and notes outstanding on the

effective date of this act, plus the total amount of bonds and notes

contracted after the effective date of this act to finance projects on

progress on the effective date of this act as determined by the New York

state public authorities control board created pursuant to section fifty

of the public authorities law whose affirmative determination shall be

conclusive as to all matters of law and fact solely for the purposes of

the limitations contained in this paragraph, but in no event shall the

total amount of bonds so secured by such a capital reserve fund or funds

exceed nine hundred sixteen million dollars, excluding bonds issued to

refund such outstanding bonds until the date of redemption of such

outstanding bonds. As outstanding bonds so secured are paid, the amount

so secured shall be reduced accordingly but the redemption of such

outstanding bonds from the proceeds of refunding bonds shall not reduce

the amount so secured.

(d) In computing any hospital and nursing home capital reserve fund

for the purposes of this section, securities in which all or a portion

of such reserve fund shall be invested shall be valued at par, or if

purchased at less than par, at their cost to the agency.

7. The agency shall create and establish one or more additional

special funds (herein referred to as hospital and nursing home general

reserve funds) and shall, to the extent provided in the applicable bond

resolution of the agency authorizing the issuance of hospital and

nursing home project bonds, pay into any such fund the fees and charges

collected by the agency pursuant to paragraph (b) of subdivision eleven

of section forty-four of this article and any monies which the agency

shall transfer from the hospital and nursing home capital reserve fund

pursuant to the provisions of paragraph (a) of subdivision six of this

section. Such monies and any other monies paid into a hospital and

nursing home general reserve fund may, in the discretion of the agency,

but subject to agreements with bondholders and noteholders, be used by

the agency (a) for the repayment of advances from the state in

accordance with the provisions of repayment agreements between the

agency and the director of the budget, (b) to reimburse the department

of health the reasonable costs of the services performed by the

commissioner of health and the department of health pursuant to

subdivision three of section fifty-five of this article, (c) to pay all

costs, expenses and charges of financing, including fees and expenses of

trustees and paying agents, (d) for transfers to the hospital and

nursing home capital reserve fund, (e) for the payment of principal and

interest on hospital and nursing home project bonds and notes issued by

the agency when the same shall become due whether at maturity or on call

for redemption and for the payment of any redemption premium required to

be paid where such hospital and nursing home project bonds and notes are

redeemed prior to their stated maturities and to purchase hospital and

nursing home project bonds or notes issued by the agency, or (f) for

such other corporate purposes of the agency as the agency in its

discretion shall determine and provide.

8. (a) The agency may create and establish one or more additional

reserve funds to be known as health facilities reserve funds and may pay

into such reserve funds (1) any monies appropriated and made available

by the state for the purposes of such funds, (2) any proceeds of sale of

health facilities notes or health facilities bonds, to the extent

provided in the resolution of the agency authorizing the issuance

thereof, and (3) any other monies which may be made available to the

agency for the purposes of such funds from any other source or sources.

The monies held in or credited to any health facilities reserve fund

established under this subdivision, except as hereinafter provided,

shall be used solely for the payment of the principal of health

facilities bonds of the agency secured by such reserve fund, as the same

mature, required payments to any sinking fund established in a

resolution of the agency for the amortization of term bonds (hereinafter

referred to as "sinking fund payments") the purchase or redemption of

such health facilities bonds of the agency, the payment of interest on

such health facilities bonds of the agency, or the payment of any

redemption premium required to be paid when such bonds are redeemed

prior to maturity; provided, however, that monies in any such fund shall

not be withdrawn therefrom at any time in such amount as would reduce

the amount of such fund to less than the maximum amount of principal and

interest maturing and becoming due and sinking fund payments required to

be made in any succeeding calendar year on the health facilities bonds

of the agency then outstanding and secured by such reserve fund, except

for the purpose of paying principal, interest and sinking fund payments

becoming due on the health facilities bonds of the agency secured by

such reserve fund maturing and becoming due and for the payment of which

other monies of the agency are not available. For the purposes of this

subdivision eight, in computing the maximum amount of principal maturing

at a single future date (herein called "term bonds") in any succeeding

calendar year, the principal amount of any such term bonds which are

subject to mandatory redemption prior to such future date by sinking

fund payments shall not be included in the computation determining the

maximum amount of principal maturing in said future year. Any income or

interest earned by, or increment to, any such health facilities reserve

fund due to the investment thereof may be transferred to any other fund

or account of the agency to the extent it does not reduce the amount of

such health facilities reserve fund below the maximum amount of

principal and interest maturing and becoming due and sinking fund

payments required to be made in any succeeding calendar year on all

health facilities bonds of the agency then outstanding and secured by

such reserve fund.

(b) The agency shall not issue health facilities bonds at any time if

the maximum amount of principal and interest maturing and becoming due

and sinking fund payments required to be made in a succeeding calendar

year on the health facilities bonds outstanding and then to be issued

and secured by any health facilities reserve fund will exceed the amount

of such reserve account at the time of issuance, unless the agency, at

the time of issuance of such bonds, shall deposit in such reserve fund

from the proceeds of the bonds so to be issued, or otherwise, an amount

which together with the amount then in such reserve fund will be not

less than the maximum amount of principal and interest maturing and

becoming due and sinking fund payments required to be made in any

succeeding calendar year on the health facilities bonds then to be

issued and on all other health facilities bonds of the agency then

outstanding and secured by such reserve fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article, provision is

made in paragraph (a) of this subdivision for the accumulation in each

health facilities reserve fund of an amount equal to the maximum amount

of principal and interest maturing and becoming due and sinking fund

payments required to be made in any succeeding calendar year on all

health facilities bonds of the agency then outstanding and secured by

such reserve fund. In order further to assure the maintenance of such

health facilities reserve funds, there shall be annually apportioned and

paid to the agency for deposit in each health facilities reserve fund

such sum, if any, as shall be certified by the chairman of the agency to

the governor and director of the budget as necessary to restore such

reserve fund to an amount equal to the maximum amount of principal and

interest maturing and becoming due and sinking fund payments required to

be made in any succeeding calendar year on the health facilities bonds

of the agency then outstanding and secured by such reserve fund. The

chairman of the agency shall annually, on or before December first, make

and deliver to the governor and director of the budget his certificate

stating the sums, if any, required to restore each such health

facilities reserve fund to the amount aforesaid, and the sums so

certified, if any, shall be apportioned and paid to the agency during

the then current state fiscal year. The principal amount of bonds

secured by a health facilities reserve fund or funds to which state

funds are apportionable pursuant to this paragraph shall be limited to

the total amount of bonds and notes outstanding on the effective date of

this act, plus the total amount of bonds and notes contracted after the

effective date of this act to finance projects in progress on the

effective date of this act as determined by the New York state public

authorities control board created pursuant to section fifty of the

public authorities law whose affirmative determination shall be

conclusive as to all matters of law and fact solely for the purposes of

the limitations contained in this paragraph, but in no event shall the

total amount of bonds so secured by such a reserve fund or funds exceed

six hundred seventy-five million dollars, excluding bonds issued to

refund such outstanding bonds until the date of redemption of such

outstanding bonds. As outstanding bonds so secured are paid, the amount

so secured shall be reduced accordingly but the redemption of such

outstanding bonds from the proceeds of refunding bonds shall not reduce

the amounts so secured.

(d) In computing any health facilities reserve fund for the purposes

of this section, securities in which all or a portion of such reserve

fund shall be invested shall be valued at par, or if purchased at less

than par, at their cost to the agency.

9. (a) The agency may create and establish one or more additional

reserve funds to be known as urban rental debt service reserve funds and

may pay into such reserve funds (1) any monies appropriated and made

available by the state for the purposes of such funds, (2) any proceeds

of sale of urban rental project notes or urban rental project bonds, to

the extent provided in the resolution of the agency authorizing the

issuance thereof, and (3) any other monies which may be made available

to the agency for the purposes of such funds from any other source or

sources. The monies held in or credited to any urban rental debt service

reserve fund established under this subdivision except as hereinafter

provided, shall be used solely for the payment of the principal of urban

rental project bonds of the agency secured by such reserve fund, as the

same mature, required payments to any sinking fund established in a

resolution of the agency for the amortization of term bonds (hereinafter

referred to as "sinking fund payments"), the purchase or redemption of

such urban rental project bonds of the agency, the payment of interest

on such urban rental project bonds of the agency, or the payment of any

redemption premium required to be paid when such bonds are redeemed

prior to maturity; provided, however, that monies in any such fund shall

not be withdrawn therefrom at any time in such amount as would reduce

the amount of such fund to less than the maximum amount of principal and

interest maturing and becoming due and sinking fund payments required to

be made in any succeeding calendar year on the urban rental project

bonds of the agency then outstanding and secured by such reserve fund,

except for the purpose of paying principal, interest and sinking fund

payments becoming due on the urban rental project bonds of the agency

secured by such reserve fund maturing and becoming due and for the

payment of which other monies of the agency are not available. For the

purposes of this subdivision nine, in computing the maximum amount of

principal maturing at a single future date (herein called "term bonds")

in any succeeding calendar year, the principal amount of any such term

bonds which are subject to mandatory redemption prior to such future

date by sinking fund payments shall not be included in the computation

determining the maximum amount of principal maturing in said future

year. Any income or interest earned by, or increment to, any such urban

rental debt service reserve fund due to the investment thereof may be

transferred to any other fund or account of the agency to the extent it

does not reduce the amount of such urban rental debt service reserve

fund below the maximum amount of principal and interest maturing and

becoming due and sinking fund payments required to be made in any

succeeding calendar year on all urban rental project bonds of the agency

then outstanding and secured by such reserve fund.

(b) The agency shall not issue urban rental project bonds at any time

if the maximum amount of principal and interest maturing and becoming

due and sinking fund payments required to be made in any succeeding

calendar year on the urban rental project bonds outstanding and then to

be issued and secured by an urban rental debt service reserve fund will

exceed the amount of such reserve account at the time of issuance,

unless the agency, at the time of issuance of such bonds, shall deposit

in such reserve fund from the proceeds of the bonds so to be issued, or

otherwise, an amount which together with the amount then in such reserve

fund, will be not less than the maximum amount of principal and interest

maturing and becoming due and sinking fund payments required to be made

in any succeeding calendar year on the urban rental project bonds then

to be issued and on all other urban rental project bonds of the agency

then outstanding and secured by such reserve fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article provision is

made in paragraph (a) of this subdivision for the accumulation in each

urban rental debt service reserve fund of an amount equal to the maximum

amount of principal and interest maturing and becoming due and sinking

fund payments required to be made in any succeeding calendar year on all

urban rental project bonds of the agency then outstanding and secured by

such reserve fund. In order further to assure the maintenance of such

urban rental debt service reserve funds, there shall be annually

apportioned and paid to the agency for deposit in each urban rental debt

service reserve fund such sum, if any, as shall be certified by the

chairman of the agency to the governor and director of the budget as

necessary to restore such reserve fund to an amount equal to the maximum

amount of principal and interest maturing and becoming due and sinking

fund payments required to be made in any succeeding calendar year on the

urban rental project bonds of the agency then outstanding and secured by

such reserve fund. The chairman of the agency shall annually, on or

before December first, make and deliver to the governor and director of

the budget his certificate stating the sums, if any, required to restore

each such urban rental debt service reserve fund to the amount

aforesaid, and the sums so certified, if any, shall be apportioned and

paid to the agency during the then current state fiscal year. The

principal amount of bonds secured by an urban rental debt service

reserve fund or funds to which state funds are apportionable pursuant to

this paragraph shall be limited to the total amount of bonds and notes

outstanding on the effective date of this act, plus the total amount of

bonds and notes contracted after the effective date of this act to

finance projects in progress on the effective date of this act as

determined by the New York state public authorities control board

created pursuant to section fifty of the public authorities law whose

affirmative determination shall be conclusive as to all matters of law

and fact solely for the purposes of the limitations contained in this

paragraph, but in no event shall the total amount of bonds so secured by

such a debt service reserve fund or funds exceed six hundred forty-five

million dollars, excluding bonds issued to refund such outstanding bonds

until the date of redemption of such outstanding bonds. As outstanding

bonds so secured are paid, the amount so secured shall be reduced

accordingly but the redemption of such outstanding bonds from the

proceeds of refunding bonds shall not reduce the amount so secured.

(d) In computing any urban rental debt service reserve fund for the

purposes of this section, securities in which all or a portion of such

reserve fund shall be invested shall be valued at par if purchased at

par, or if purchased at other than par, at amortized value.

10. (a) The agency may create and establish a special fund to be known

as youth facilities capital reserve fund and may pay into such reserve

funds (1) any monies appropriated and made available by the state for

the purposes of such funds, (2) any proceeds of sale of youth facilities

project notes or youth facilities project bonds, to the extent provided

in the resolution of the agency authorizing the issuance thereof, and

(3) any other monies which may be made available to the agency for the

purposes of such accounts from any other source or sources. The monies

held in or credited to the capital reserve fund established under this

subdivision except as hereinafter provided, shall be used solely for the

payment of principal of youth facilities project bonds of the agency

secured by such reserve fund, as the same mature, the purchase of such

youth facilities project bonds of the agency, the payment of interest on

youth facilities project bonds of the agency, or the payment of any

redemption premium required to be paid when such bonds are redeemed

prior to maturity; provided, however, that monies in any such fund shall

not be withdrawn therefrom at any time in such amount as would reduce

the amount of such fund to less than the maximum amount of principal and

interest maturing and becoming due in any succeeding calendar year on

the youth facilities project bonds of the agency then outstanding and

secured by such reserve fund, except for the purpose of paying principal

and interest on youth facilities project bonds of the agency secured by

such reserve fund maturing and becoming due and for the payment of which

other monies of the agency are not available. Any income or interest

earned by, or increment to, any such youth facilities capital reserve

fund due to the investment thereof may be transferred to the youth

facilities general reserve fund or other fund of the agency, to the

extent it does not reduce the amount of such youth facilities capital

reserve fund below the maximum amount of principal and interest maturing

and becoming due in any succeeding calendar year on all youth facilities

project bonds of the agency then outstanding and secured by such reserve

fund.

(b) The agency shall not issue youth facilities project bonds and

notes in an aggregate principal amount exceeding one hundred million

dollars excluding youth facilities project bonds and youth facilities

project notes issued to refund outstanding youth facilities project

bonds and youth facilities project notes, nor shall it issue youth

facilities project bonds at any time secured by the youth facilities

capital reserve fund if the maximum amount of principal and interest

maturing and becoming due in a succeeding calendar year on the youth

facilities project bonds outstanding and then to be issued and secured

by the youth facilities capital reserve fund will exceed the amount of

such reserve fund at the time of issuance, unless the agency, at the

time of issuance of such bonds, shall deposit in such reserve fund from

the proceeds of the bonds so to be issued, or otherwise, an amount which

together with the amount then in such reserve fund, will be not less

than the maximum amount of principal and interest maturing and becoming

due in any succeeding calendar year on the youth facilities project

bonds then to be issued and on all other youth facilities project bonds

of the agency then outstanding and secured by such reserve fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article provision is

made in paragraph (a) of this subdivision for the accumulation in the

youth facilities capital reserve fund of an amount equal to the maximum

amount of principal and interest maturing and becoming due in any

succeeding calendar year on all youth facilities project bonds of the

agency then outstanding and secured by such reserve fund. In order

further to assure the maintenance of such youth facilities capital

reserve fund, there shall be annually apportioned and paid to the agency

for deposit in such youth facilities capital reserve fund such sum, if

any, as shall be certified by the chairman of the agency to the governor

and director of the budget as necessary to restore such reserve fund to

an amount equal to the maximum amount of principal and interest maturing

and becoming due in any succeeding calendar year on the youth facilities

project bonds of the agency then outstanding and secured by such reserve

fund. The chairman of the agency shall annually, on or before December

first, make and deliver to the governor and director of the budget his

certificate stating the sums, if any, required to restore such youth

facilities capital reserve fund to the amount aforesaid, and the sums so

certified, if any, shall be apportioned and paid to the agency during

the then current state fiscal year. The principal amount of bonds

secured by the youth facilities capital reserve fund to which state

funds are apportionable pursuant to this paragraph shall be limited to

the total amount of bonds and notes outstanding on the effective date of

this act, plus the total amount of bonds and notes contracted after the

effective date of this act to finance projects in progress on the

effective date of this act as determined by the New York state public

authorities control board created pursuant to section fifty of the

public authorities law whose affirmative determination shall be

conclusive as to all matters of law and fact solely for the purposes of

the limitations contained in this paragraph, but in no event shall the

total amount of bonds so secured by such a capital reserve fund exceed

twenty-four million dollars, excluding bonds issued to refund such

outstanding bonds until the date of redemption of such outstanding

bonds. As outstanding bonds so secured are paid, the amount so secured

shall be reduced accordingly but the redemption of such outstanding

bonds from the proceeds of refunding bonds shall not reduce the amount

so secured.

(d) In computing any youth facilities capital reserve fund for the

purpose of this section, securities in which all or a portion of such

reserve fund shall be invested shall be valued at par if purchased at

par, or if purchased at other than par, at amortized value.

11. The agency shall create and establish a special fund (herein

referred to as the youth facilities general reserve fund) and shall pay

into such fund all fees and charges collected by the agency pursuant to

paragraph (c) of subdivision eleven of section forty-four of this

article and any monies which the agency shall transfer from the youth

facilities capital reserve fund pursuant to the provisions of paragraph

(a) of subdivision ten of this section. Such monies and any other monies

paid into the youth facilities general reserve fund may, in the

discretion of the agency, but subject to agreements with bondholders and

noteholders, be used by the agency (a) for the repayment of advances

from the state in accordance with the provisions of repayment agreements

between the agency and the director of the budget, (b) to reimburse the

department of social services the reasonable costs of the services

performed by the commissioner of social services and the department of

social services pursuant to subdivision four of section fifty-five of

this article, (c) to pay all costs, expenses and charges of financing,

including fees and expenses of trustees and paying agents, (d) for

transfers to the youth facilities capital reserve fund, (e) for the

payment of principal of and interest on youth facilities project bonds

and notes issued by the agency when the same shall become due whether at

maturity or on call for redemption and for the payment of any redemption

premium required to be paid where such youth facilities project bonds

and notes are redeemed prior to their stated maturities and to purchase

youth facilities project bonds or notes issued by the agency, or (f) for

such other corporate purposes of the agency as the agency in its

discretion shall determine and provide.

12. (a) The agency may create and establish a special fund to be known

as community mental health services and developmental disabilities

services capital reserve fund and may pay into such reserve funds (1)

any monies appropriated and made available by the state for the purposes

of such funds, (2) any proceeds of sale of community mental health

services and developmental disabilities services project notes or

community mental health services and developmental disabilities services

project bonds, to the extent provided in the resolution of the agency

authorizing the issuance thereof, and (3) any other monies which may be

made available to the agency for the purposes of such accounts from any

other source or sources. The monies held in or credited to the capital

reserve fund established under this subdivision except as hereinafter

provided, shall be used solely for the payment of principal of community

mental health services and developmental disabilities services project

bonds of the agency secured by such reserve fund, as the same mature,

the purchase of such community mental health services and developmental

disabilities services project bonds of the agency, the payment of

interest on such community mental health services and developmental

disabilities services project bonds of the agency, or the payment of any

redemption premium required to be paid when such bonds are redeemed

prior to maturity; provided, however, that monies in any such fund shall

not be withdrawn therefrom at any time in such amount as would reduce

the amount of such fund to less than the maximum amount of principal and

interest maturing and becoming due in any succeeding calendar year on

the community mental health services and developmental disabilities

services project bonds of the agency then outstanding and secured by

such reserve fund, except for the purpose of paying principal and

interest on community mental health services and developmental

disabilities services project bonds of the agency secured by such

reserve fund maturing and becoming due and for the payment of which

other monies of the agency are not available. Any income or interest

earned by, or increment to, any such community mental health services

and developmental disabilities services capital reserve fund due to the

investment thereof may be transferred to the community mental health

services and developmental disabilities services general reserve fund or

other fund of the agency, to the extent it does not reduce the amount of

such community mental health services and developmental disabilities

services capital reserve fund below the maximum amount of principal and

interest maturing and becoming due in any succeeding calendar year on

all community mental health services and developmental disabilities

services project bonds of the agency then outstanding and secured by

such reserve fund.

(b) The agency shall not issue community mental health services and

developmental disabilities services project bonds and notes in an

aggregate principal amount exceeding one hundred million dollars

excluding community mental health services and developmental

disabilities services project bonds and community mental health services

and developmental disabilities services project notes issued to refund

outstanding community mental health services and developmental

disabilities services project bonds and community mental health services

and developmental disabilities services project notes, nor shall it

issue community mental health services and developmental disabilities

services project bonds at any time secured by the community mental

health services and developmental disabilities services capital reserve

fund if the maximum amount of principal and interest maturing and

becoming due in a succeeding calendar year on the community mental

health services and developmental disabilities services project bonds

outstanding and then to be issued and secured by the community mental

health services and developmental disabilities services capital reserve

fund will exceed the amount of such reserve fund at the time of

issuance, unless the agency, at the time of issuance of such bonds,

shall deposit in such reserve fund from the proceeds of the bonds so to

be issued, or otherwise, an amount which together with the amount then

in such reserve fund, will be not less than the maximum amount of

principal and interest maturing and becoming due in any succeeding

calendar year on the community mental health services and developmental

disabilities services project bonds then to be issued and on all other

community mental health services and developmental disabilities services

project bonds of the agency then outstanding and secured by such reserve

fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article provision is

made in paragraph (a) of this subdivision for the accumulation in the

community mental health services and developmental disabilities services

capital reserve fund of an amount equal to the maximum amount of

principal and interest maturing and becoming due in any succeeding

calendar year on all community mental health services and developmental

disabilities services project bonds of the agency then outstanding and

secured by such reserve fund. In order further to assure the maintenance

of such community mental health services and developmental disabilities

services capital reserve fund, there shall be annually apportioned and

paid to the agency for deposit in such community mental health services

and developmental disabilities services capital reserve fund such sum,

if any, as shall be certified by the chairman of the agency to the

governor and director of the budget as necessary to restore such reserve

fund to an amount equal to the maximum amount of principal and interest

maturing and becoming due in any succeeding calendar year on the

community mental health services and developmental disabilities services

project bonds of the agency then outstanding and secured by such reserve

fund. The chairman of the agency shall annually, on or before December

first, make and deliver to the governor and director of the budget his

or her certificate stating the sums, if any, required to restore such

community mental health services and developmental disabilities services

capital reserve fund to the amount aforesaid, and the sums so certified,

if any, shall be apportioned and paid to the agency during the then

current state fiscal year. The principal amount of bonds secured by the

community mental health services and developmental disabilities services

capital reserve fund to which state funds are apportionable pursuant to

this paragraph shall be limited to the total amount of bonds and notes

outstanding on the effective date of this act, plus the total amount of

bonds and notes contracted after the effective date of this act to

finance projects in progress on the effective date of this act as

determined by the New York state public authorities control board

created pursuant to section fifty of the public authorities law whose

affirmative determination shall be conclusive as to all matters of law

and fact solely for the purposes of the limitations contained in this

paragraph, but in no event shall the total amount of bonds so secured by

such a capital reserve fund or funds exceed thirteen million dollars,

excluding bonds issued to refund such outstanding bonds until the date

of redemption of such outstanding bonds. As outstanding bonds so secured

are paid, the amount so secured shall be reduced accordingly but the

redemption of such outstanding bonds from the proceeds of refunding

bonds shall not reduce the amount so secured.

(d) In computing any community mental health services and

developmental disabilities services capital reserve fund for the

purposes of this section, securities in which all or a portion of such

reserve fund shall be invested shall be valued at par if purchased at

par, or if purchased at other than par, at amortized value.

13. The agency shall create and establish a special fund (herein

referred to as community mental health services and developmental

disabilities services general reserve fund) and shall pay into such fund

all fees and charges collected by the agency pursuant to paragraph (c)

of subdivision eleven of section forty-four of this article and any

monies which the agency shall transfer from the community mental health

services and developmental disabilities services capital reserve fund

pursuant to the provisions of paragraph (a) of subdivision ten of this

section. Such monies and any other monies paid into the community mental

health services and developmental disabilities services general reserve

fund may, in the discretion of the agency, but subject to agreements

with bondholders and noteholders, be used by the agency (a) for the

repayment of advances from the state in accordance with the provisions

of repayment agreements between the agency and the director of the

budget, (b) to reimburse the department of mental hygiene the reasonable

costs of the services performed by the commissioner of mental hygiene

and the department of mental hygiene pursuant to subdivision four of

section fifty-five of this article, including the reasonable costs of

such services performed by the health and mental hygiene facilities

improvement corporation upon request by the commissioner of mental

hygiene pursuant to the provisions of section 75.25 of the mental

hygiene law, (c) to pay all costs, expenses and charges of financing,

including fees and expenses of trustees and paying agents, (d) for

transfers to the community mental health services and developmental

disabilities services capital reserve fund, (e) for the payment of

principal of and interest on community mental health services and

developmental disabilities services project bonds and notes issued by

the agency when the same shall become due whether at maturity or on call

for redemption and for the payment of any redemption premium required to

be paid where such community mental health services and developmental

disabilities services project bonds and notes are redeemed prior to

their stated maturities and to purchase community mental health services

and developmental disabilities services project bonds or notes issued by

the agency, or (f) for such other corporate purposes of the agency as

the agency in its discretion shall determine and provide.

14. (a) The agency may create and establish a special fund to be known

as community senior citizens services capital reserve fund and may pay

into such reserve fund (1) any moneys appropriated and made available by

the state for the purposes of such fund, (2) any proceeds of sale of

community senior citizens services project notes or community senior

citizens services project bonds, to the extent provided in the

resolution of the agency authorizing the issuance thereof, and (3) any

other moneys which may be made available to the agency for the purposes

of such accounts from any other source or sources. The moneys held in or

credited to the capital reserve fund established under this subdivision

except as hereinafter provided, shall be used solely for the payment of

principal of community senior citizens services project bonds of the

agency secured by such reserve fund, as the same mature, the purchase of

such community senior citizens services project bonds of the agency, the

payment of interest on such community senior citizens services project

bonds of the agency, or the payment of any redemption premium required

to be paid when such bonds are redeemed prior to maturity; provided,

however, that moneys in any such fund shall not be withdrawn thereform

at any time in such amount as would reduce the amount of such fund to

less than the maximum amount of principal and interest maturing and

becoming due in any succeeding calendar year on the community senior

citizens services project bonds of the agency then outstanding and

secured by such reserve fund, except for the purpose of paying principal

and interest on community senior citizens services project bonds of the

agency secured by such reserve fund maturing and becoming due and for

the payment of which other moneys of the agency are not available. Any

income or interest earned by, or increment to, any such community senior

citizens services capital reserve fund due to the investment thereof may

be transferred to the community senior citizens services general reserve

fund or other fund of the agency, to the extent it does not reduce the

amount of such community senior citizens services capital reserve fund

below the maximum amount of principal and interest maturing and becoming

due in any succeeding calendar year on all community senior citizens

services project bonds of the agency then outstanding and secured by

such reserve fund.

(b) The agency shall not issue community senior citizens services

project bonds and notes in an aggregate principal amount exceeding fifty

million dollars excluding community senior citizens services project

bonds and community senior citizens services project notes issued to

refund outstanding community senior citizens services project bonds and

community senior citizens services project notes, nor shall it issue

community senior citizens services project bonds at any time secured by

the community senior citizens capital reserve fund if the maximum amount

of principal and interest maturing and becoming due in a succeeding

calendar year on the community senior citizens services project bonds

outstanding and then to be issued and secured by the community senior

citizens services capital reserve fund will exceed the amount of such

reserve fund at the time of issuance, unless the agency, at the time of

issuance of such bonds, shall deposit in such reserve fund from the

proceeds of the bonds so to be issued, or otherwise, an amount which

together with the amount then in such reserve fund, will be not less

than the maximum amount of principal and interest maturing and becoming

due in any succeeding calendar year on the community senior citizens

services project bonds then to be issued and on all other community

senior citizens services project bonds of the agency then outstanding

and secured by such reserve fund.

(c) To assure the continued operation and solvency of the agency for

the carrying out of the public purposes of this article provision is

made in paragraph (a) of this subdivision for the accumulation in the

community senior citizens services capital reserve fund of an amount

equal to the maximum amount of principal and interest maturing and

becoming due in any succeeding calendar year on all community senior

citizens services project bonds of the agency then outstanding and

secured by such reserve fund. In order further to assure the maintenance

of such community senior citizens services capital reserve fund, there

shall be annually apportioned and paid to the agency for deposit in such

community senior citizens services capital reserve fund such sum, if

any, as shall be certified by the chairman of the agency to the governor

and director of the budget as necessary to restore such reserve fund to

an amount equal to the maximum amount of principal and interest maturing

and becoming due in any succeeding calendar year on the community senior

citizens services project bonds of the agency then outstanding and

secured by such reserve fund. The chairman of the agency shall annually,

on or before December first, make and deliver to the governor and

director of the budget his certificate stating the sums, if any,

required to restore such community senior citizens services capital

reserve fund to the amount aforesaid, and the sums so certified, if any,

shall be apportioned and paid to the agency during the then current

state fiscal year. The principal amount of bonds secured by the

community senior citizens services capital reserve fund to which state

funds are apportionable pursuant to this paragraph shall be limited to

the total amount of bonds and notes outstanding on the effective date of

this act, plus the total amount of bonds and notes contracted after the

effective date of this act to finance projects in progress on the

effective date of this act as determined by the New York state public

authorities control board created pursuant to section fifty of the

public authorities law whose affirmative determination shall be

conclusive as to all matters of law and fact solely for the purposes of

the limitations contained in this paragraph, but in no event shall the

total amount of bonds so secured by such a capital reserve fund or funds

exceed two million eight hundred thousand dollars, excluding bonds

issued to refund such outstanding bonds until the date of redemption of

such outstanding bonds. As outstanding bonds so secured are paid, the

amount so secured shall be reduced accordingly but the redemption of

such outstanding bonds from the proceeds of refunding bonds shall not

reduce the amount so secured.

(d) In computing any community senior citizens services capital

reserve fund for the purposes of this section, securities in which all

or a portion of such reserve fund shall be invested shall be valued at

par if purchased at par, or if purchased at other than par, at amortized

value.

15. The agency shall create and establish a special fund (herein

referred to as community senior citizens services general reserve fund)

and shall pay into such fund all fees and charges collected by the

agency pursuant to subdivision eleven-a of section forty-four of this

article and any moneys which the agency shall transfer from the

community senior citizens services capital reserve fund pursuant to the

provisions of paragraph (a) of subdivision fourteen of this section.

Such moneys and any other moneys paid into the community senior citizens

services general reserve fund may, in the discretion of the agency, but

subject to agreements with bondholders and noteholders, be used by the

agency (a) for the repayment of advances from the state in accordance

with the provisions of repayment agreements between the agency and the

director of the budget, (b) to reimburse the department of social

services of the state of New York for the reasonable costs of the

services performed by such department pursuant to subdivision six of

section fifty-five of this article, (c) to pay all costs, expenses and

charges of financing, including fees and expenses of trustees and paying

agents, (d) for transfers to the community senior citizens services

capital reserve fund, (e) for the payment of principal of and interest

on community senior citizens services project bonds and notes issued by

the agency when the same shall become due whether at maturity or on call

for redemption and for the payment of any redemption premium required to

be paid where such community senior citizens services project bonds and

notes are redeemed prior to their stated maturities and to purchase

community senior citizens services project bonds or notes issued by the

agency, or (f) for such other corporate purposes of the agency as it, in

its discretion, shall determine and provide.

16. (a) The agency may create and establish one or more special funds

to be known as community mental health services and developmental

disabilities services capital reserve funds and may pay into such

reserve funds (1) any monies appropriated and made available by the

state for the purposes of such funds, (2) any proceeds of the sale of

community mental health services and developmental disabilities services

project revenue bonds or notes, to the extent provided in the resolution

of the agency authorizing the issuance thereof, and (3) any other monies

which may be made available to the agency for the purposes of such fund

or funds from any other source or sources. The monies held in or

credited to a capital reserve fund established under this subdivision,

except as hereinafter provided and as provided in agreements with

bondholders and noteholders, shall be used solely for the payment of

principal of community mental health services and developmental

disabilities services project revenue bonds of the agency secured by

such reserve fund, as the same mature, required payments to any sinking

fund established in a resolution of the agency for the amortization of

term bonds (hereinafter referred to as "sinking fund payments"), the

purchase of such revenue bonds of the agency, the payment of interest on

such revenue bonds of the agency, or the payment of any redemption

premium required to be paid when such bonds are redeemed prior to

maturity. Any income or interest earned by, or increment to, any such

community mental health services and developmental disabilities services

capital reserve fund due to the investment thereof may be transferred to

the agency, subject to agreements with bondholders and noteholders.

(b) In computing any community mental health services and

developmental disabilities services capital reserve fund for the

purposes of this section, securities in which all or a portion of such

reserve fund shall be invested shall be valued at par if purchased at

par, or if purchased at other than par, at the amortized value.

(c) The agency shall create and establish one or more special funds

(herein referred to as community mental health services and

developmental disabilities services general reserve funds) and shall to

the extent provided in the applicable bond resolution of the agency

authorizing the issuance of community mental health services and

developmental disabilities services project revenue bonds, pay into any

such fund the fees and charges collected by the agency pursuant to

paragraph (d) of subdivision eleven of section forty-four of this

article and any monies which the agency shall transfer from a community

mental health services and developmental disabilities services capital

reserve fund pursuant to the provisions of paragraph (a) of this

subdivision. Such monies and any other monies paid into a community

mental health services and developmental disabilities service general

reserve fund may, in the discretion of the agency, but subject to

agreements with bondholders and noteholders, be used by the agency (i)

for the repayment of advances from the state in accordance with the

provisions of repayment agreements between the agency and the director

of the budget, (ii) to reimburse the department of mental hygiene the

reasonable costs of the services performed by the commissioner of mental

hygiene and the department of mental hygiene pursuant to subdivision

five of section fifty-five of this article, including the reasonable

costs of such services performed by the facilities development

corporation upon request by the commissioner of mental hygiene pursuant

to the provisions of section 75.25 of the mental hygiene law, (iii) to

pay all costs, expenses and charges of financing, including fees and

expenses of trustees and paying agents, (iv) for transfers to a

community mental health services and developmental disabilities services

capital reserve fund, (v) for the payment of principal of and interest

on community mental health services and developmental disabilities

services project revenue bonds and notes issued by the agency when the

same shall become due whether at maturity or on call for redemption and

for the payment of any redemption premium required to be paid where such

community mental health services and developmental disabilities services

project revenue bonds and notes are redeemed prior to their stated

maturities and to purchase community mental health services and

developmental disabilities services revenue bonds or notes issued by the

agency, or (vi) for such other corporate purposes of the agency as the

agency in its discretion shall determine and provide.

§ 47-a — State university construction bonds and notes

State university construction bonds and notes. 1.

Definitions. For the purposes of section forty-seven and of this

section:

a. "State university facility" shall mean a classroom, lecture hall,

library, laboratory or other academic building, or any structure on or

improvement to real property of any kind or description, including

fixtures and equipment which are an integral part of any such building,

structure or improvement, a walkway or roadway, and improvements and

connections for water, sewer, gas, electrical, telephone, heating, air

conditioning and other utility services at a state-operated institution

or statutory or contract college under the jurisdiction of the state

university of New York, and shall include a housing unit or any

emergency temporary housing, with necessary and usual attendant and

related facilities and equipment, for the use of students, faculty and

staff, and their families, at such an institution or statutory or

contract college.

b. "State university construction bonds" and "state university

construction notes" shall mean bonds and notes respectively, issued by

the agency pursuant to subdivision two of this section.

2. Additional powers of the agency.

a. The agency shall have power to cause state university facilities to

be constructed, acquired, reconstructed, rehabilitated or improved on

any real property leased or made available by the state university of

New York, or any state-operated institution or statutory or contract

college under the jurisdiction of the state university of New York,

under an agreement with the state university construction fund created

by section three hundred seventy-one of the education law and in

connection therewith may authorize the state university construction

fund to act as its agent for the purpose of constructing, acquiring,

reconstructing, rehabilitating or improving such state university

facilities.

b. The agency shall have power and is hereby authorized from time to

time to issue negotiable bonds and notes in conformity with applicable

provisions of the uniform commercial code in such principal amount as,

in the opinion of the agency, shall be necessary, after taking into

account other monies which may be available for the purpose, to provide

sufficient funds for the construction, acquisition, reconstruction,

rehabilitation or improvement of state university facilities pursuant to

the preceding paragraph of this subdivision, the payment of interest on

state university construction bonds and state university construction

notes issued for such purposes, the establishment of reserves to secure

such bonds and notes, and all other expenditures of the agency incident

to and necessary or convenient for any such construction, acquisition,

reconstruction, rehabilitation or improvement; provided, however, that

the agency shall not issue state university construction bonds and state

university construction notes in an aggregate principal amount exceeding

three billion dollars, excluding state university construction bonds and

state university construction notes issued to refund outstanding state

university construction bonds or state university construction notes. In

no event, however, shall the agency issue state university construction

bonds or state university construction notes after August first,

nineteen hundred eighty-eight, except state university construction

bonds or state university construction notes issued to refund

outstanding state university construction bonds or state university

construction notes; provided, however, that only state university

construction bonds to be issued to refund state university construction

bonds may be issued after August first, nineteen hundred eighty-eight.

Such bonds shall be excluded from such limitation as to the aggregate

principal amount of state university construction bonds and state

university construction notes if the present value of the aggregate debt

service on the refunding bonds does not exceed the present value of the

aggregate debt service on the bonds refunded thereby. For purposes

hereof, the present value of the aggregate debt service of the refunding

bonds and the aggregate debt service of the bonds refunded, shall be

calculated by utilizing the true interest cost of the refunding bonds,

which shall be that rate arrived at by doubling the semi-annual interest

rate (compounded semi-annually) necessary to discount the debt service

payments on the refunding bonds from the payment dates thereof to the

date of issue of the refunding bonds to the purchase price of the

refunding bonds, including interest accrued thereon prior the issuance

thereof.

3. Application of other provisions of article. Except as stated in

section forty-seven, the other provisions of this article shall apply to

state university construction bonds and state university construction

notes issued by the agency pursuant to this section, provided, however,

that such bonds and notes, subject to any agreements with the holders of

particular bonds or notes pledging any specified portions thereof, shall

be secured by a pledge to the payment thereof of (i) rentals paid to the

agency with respect to state university facilities financed with the

proceeds of such bonds and notes, and (ii) any other assets, monies or

accounts pledged or assigned to the agency as security for the payment

of such rentals, and provided further that no resolution or resolutions

authorizing state university construction bonds and state university

construction notes shall (i) pledge all or any part of the fees and

charges made or received by the agency pursuant to subdivision eleven of

section forty-four in connection with the making of mortgage loans or

commitments therefor, or all or any part of the monies received in

payment of such mortgage loans and interest thereon, or (ii) pledge all

or any part of the mortgages of the agency or obligations securing the

same, or (iii) provide as to the use and disposition of the gross income

from mortgages owned by the agency or as to the payment of principal of

mortgages owned by the agency, or (iv) pledge all or any part of the

rentals paid to the agency under leases, subleases or other agreements

for health facilities or mental hygiene facilities entered into by the

agency in accordance with this article, or (v) pledge or assign all or

any part of any other assets, monies or accounts pledged or assigned to

the agency as security for the payment of rentals for such health

facilities or mental hygiene facilities.

4. Repayment fund. The agency shall create and establish a special

fund (herein referred to as state university repayment fund) and shall

pay into such fund any monies which the agency shall receive in payment

of rentals due under one or more lease agreements referred to in

subdivision three of this section. Such monies and any other monies paid

into the state university repayment fund may, in the discretion of the

agency but subject to agreements with the holders of state university

construction bonds and state university construction notes, be used by

the agency (a) for the repayment of advances, if any, from the state to

the agency in connection with state university facilities in accordance

with the provisions of repayment agreements between the agency and the

director of the budget, (b) to pay all costs, expenses and charges of

financing the construction, acquisition, reconstruction, rehabilitation

or improvement of state university facilities on any real property

leased or made available to the agency by the state university of New

York, including fees and expenses of trustees and paying agents and the

reasonable costs of services performed by the commissioner of housing

and division of housing in respect thereof, and (c) for the payment of

the principal of and interest on state university construction bonds or

state university construction notes issued by the agency when the same

shall become due whether at maturity or on call for redemption and for

the payment of any redemption premium required to be paid where such

bonds or notes are redeemed prior to their stated maturities, and to

purchase state university construction bonds or state university

construction notes issued by the agency.

§ 47-b — Mental hygiene improvement bonds and notes

Mental hygiene improvement bonds and notes. 1. Definitions.

For the purposes of section forty-seven and of this section:

a. "Community mental health and developmental disabilities facility"

shall mean a building, a unit within a building, a laboratory, a

classroom, a housing unit, a dining hall, an activities center, a

library, or any structure on or improvement to real property of any kind

or description, including fixtures and equipment which are an integral

part of such building, unit or structure or improvement, a walkway, a

roadway or a parking lot and improvements and connections for water,

sewer, gas, electrical, telephone, heating, air conditioning and other

utility services, or a combination of any of the foregoing, whether for

patient care and treatment or staff, staff family or service use,

located in a city, or in a county not wholly included within a city,

authorized to provide community mental health services in accordance

with the provisions of article forty-one of title E of the mental

hygiene law, which is utilized or to be utilized for the administration

and conduct of programs for people living with either mental illness or

developmental disabilities, or both, and for the provision of services

therefor. A community mental health and developmental disabilities

facility shall also mean and include a residential facility to be

operated as a community residence for the mentally disabled, and a

treatment facility for use in the conduct of an alcoholism treatment

program or of a substance abuse treatment program as defined in the

mental hygiene law.

b. "Mental hygiene facility" shall mean a building, a unit within a

building, a laboratory, a classroom, a housing unit, a dining hall, an

activities center, a library, or any structure on or improvement to real

property of any kind or description, including fixtures and equipment

which are an integral part of any such building, unit, structure or

improvement, a walkway, a roadway or a parking lot, and improvements and

connections for water, sewer, gas, electrical, telephone, heating, air

conditioning and other utility services, or a combination of any of the

foregoing, whether for patient care and treatment or staff, staff family

or service use, located at or related to any state hospital, any state

school, or any state psychiatric or research institute now or hereafter

established under the professional jurisdiction, supervision and control

of the state department of mental hygiene. A mental hygiene facility

shall mean and include a "community mental health and developmental

disabilities facility", unless such facility is expressly excepted or

the context clearly requires otherwise, and shall also mean and include

a treatment facility for use in the conduct of an alcoholism or

substance abuse treatment program as defined in the mental hygiene law,

unless such facility is expressly excepted or the context clearly

requires otherwise. The definition contained in this subdivision shall

not be construed to exclude therefrom a facility to be made available

under license or permit from the health and mental hygiene facilities

improvement corporation to a voluntary agency at the request of the

commissioners of the offices of the department of mental hygiene having

jurisdiction thereof for use in providing community mental health and

developmental disabilities services, or for use in the conduct of an

alcoholism or substance abuse treatment program.

c. "Mental hygiene improvement bonds" and "mental hygiene improvement

notes" shall mean bonds and notes, respectively, issued by the agency

pursuant to subdivision two of this section.

d. "Mental hygiene facilities improvement program" shall mean a

program undertaken by the agency and the health and mental hygiene

facilities improvement corporation for the purpose of constructing,

acquiring, reconstructing, rehabilitating or improving mental hygiene

facilities or causing such facilities to be constructed, acquired,

reconstructed, rehabilitated or improved pursuant to the health and

mental hygiene facilities improvement act and this article.

2. Additional powers of the agency.

a. The agency shall have power to lease one or more existing mental

hygiene facilities from the trustees of the health and mental hygiene

facilities improvement corporation and to construct, acquire,

reconstruct, rehabilitate and improve new mental hygiene facilities at

such facilities, or on any real property leased from the said

corporation, and to cause such new facilities to be constructed,

acquired, reconstructed, rehabilitated or improved by the trustees of

the said corporation as its agent, all in accordance with a lease,

sublease or other agreement entered into between the agency and the

trustees of the said corporation pursuant to subdivision four of section

nine of the health and mental hygiene facilities improvement act.

b. The agency shall have power and is hereby authorized from time to

time to issue negotiable bonds and notes in conformity with applicable

provisions of the uniform commercial code in such principal amount as,

in the opinion of the agency, shall be necessary, after taking into

account other monies which may be available for the purpose, to provide

sufficient funds for the construction, acquisition, reconstruction,

rehabilitation or improvement of mental hygiene facilities pursuant to

the preceding paragraph of this subdivision, the payment of interest on

mental hygiene improvement bonds and mental hygiene improvement notes

issued for such purposes, the establishment of reserves to secure such

bonds and notes, and all other expenditures of the agency incident to

and necessary or convenient for any such construction, acquisition,

reconstruction, rehabilitation or improvement; provided, however, that

the agency shall not issue mental hygiene improvement bonds and mental

hygiene improvement notes in an aggregate principal amount exceeding

seven hundred five million dollars, excluding mental hygiene improvement

bonds and mental hygiene improvement notes issued to refund outstanding

mental hygiene improvement bonds or mental hygiene improvement notes.

3. Application of other provisions of article. Except as stated in

section forty-seven, the other provisions of this article shall apply to

mental hygiene improvement bonds and mental hygiene improvement notes

issued by the agency pursuant to this section, provided, however, that

such bonds and notes, subject to any agreements with the holders of

particular bonds or notes pledging any specified portions thereof, shall

be secured by a pledge to the payment thereof of (i) rentals paid to the

agency with respect to mental hygiene facilities financed with the

proceeds of such bonds and notes, and (ii) any other assets, monies or

accounts pledged or assigned to the agency as security for the payment

of such rentals, and provided further that no resolution or resolutions

authorizing mental hygiene improvement bonds and mental hygiene

improvement notes shall (i) pledge all or any part of the fees and

charges made or received by the agency pursuant to subdivision eleven of

section forty-four in connection with the making of mortgage loans or

commitments therefor, or all or any part of the monies received in

payment of such mortgage loans and interest thereon, or (ii) pledge all

or any part of the mortgages of the agency or obligations securing the

same, or (iii) provide as to the use and disposition of the gross income

from mortgages owned by the agency or as to the payment of principal of

mortgages owned by the agency, or (iv) pledge all or any part of the

rentals paid to the agency under leases, subleases or other agreements

for state university facilities or health facilities entered into by the

agency in accordance with this article, or (v) pledge or assign all or

any part of any other assets, monies or accounts pledged or assigned to

the agency as security for the payment of rentals for such state

university facilities or health facilities.

4. Mental hygiene facilities fund. The agency shall create and

establish a special fund (herein referred to as mental hygiene

facilities fund) and shall pay into such fund any monies which the

agency shall receive in payment of rentals due under one or more leases,

subleases or other agreements entered into pursuant to subdivision four

of section nine of the health and mental hygiene facilities improvement

act and any other monies which the agency shall receive from the health

and mental hygiene facilities improvement corporation as security for or

in payment of such rentals. Such monies and any other monies paid into

the mental hygiene facilities fund may, in the discretion of the agency,

but subject to agreements with the holders of mental hygiene improvement

bonds and mental hygiene improvement notes, be used by the agency (a)

for the repayment of advances, if any, from the state to the agency in

connection with mental hygiene facilities, and any real property

required therefor, in accordance with the provisions of repayment

agreements related thereto which have been entered into with the

director of the budget, (b) to pay all costs, expenses and charges of

financing mental hygiene facilities including fees and expenses of

trustees and paying agents, (c) to pay the administrative and other

expenses of the agency allocable to the services performed by the agency

in the financing of the construction, acquisition, reconstruction,

rehabilitation or improvement of mental hygiene facilities and matters

relating thereto, (d) for the payment of the principal of and interest

on mental hygiene improvement bonds or mental hygiene improvement notes

issued by the agency when the same shall become due whether at maturity

or by call for redemption and for the payment of any redemption premium

required to be paid where such bonds or notes are redeemed prior to

their stated maturities, and to purchase mental hygiene improvement

bonds or mental hygiene improvement notes issued by the agency, or (e)

for such other corporate purposes of the agency relating to the carrying

out of its functions, powers and duties with respect to the financing of

the construction, acquisition, reconstruction, rehabilitation or

improvement of mental hygiene facilities as the agency in its discretion

shall determine and provide.

§ 47-c — Special provisions related to certain bonds and notes

Special provisions related to certain bonds and notes.

Notwithstanding any other provision of law, general or special:

1. Any public corporation or officer responsible for the acquisition

of real property or the planning, supervision or administration of

facilities thereon which may be constructed, acquired, reconstructed,

rehabilitated or improved by the agency pursuant to this article is

hereby authorized for and on behalf and in the name of the people of the

state of New York, to execute and deliver to the agency, for such

consideration, if any, as may be determined by such public corporation

or officer and the agency, but not to exceed the cost of acquisition

thereof and the cost of improvements thereon, a lease for a term not

exceeding fifty years or a quitclaim deed conveying to the agency all

the right, title and interest of the people of the state of New York in

and to any of the lands acquired by such public corporation or officer

for such facilities, and in and to any of the improvements thereon, for

the purpose of constructing, reconstructing, rehabilitating or improving

thereon one or more facilities pursuant to this article for lease or

sublease to any such public corporation or officer, in accordance with

the terms of an agreement entered into among them in accordance with

law. The agency is hereby authorized to accept any such lease or

conveyance, to lease or sublease such lands, improvements and facilities

to such public corporation or officer, and to hold the same subject to

the terms of any such lease, conveyance, sublease or other agreement,

and such public corporation or officer is hereby authorized, with the

approval of the governor, or where so designated by the governor for

such purpose, the director of the budget, to lease or sublease any such

lands or improvements or the facilities constructed, reconstructed,

rehabilitated or improved thereon pursuant to this article or other

provisions of law, and to hold such lands, improvements and facilities

subject to the terms of any such lease, sublease or other agreement.

2. a. In the event that the agency shall fail, within five years from

the date of a lease or conveyance authorized pursuant to subdivision one

of this section, to construct, reconstruct, rehabilitate or improve the

facility or facilities thereon for which the conveyance was made, as

provided for in a lease, sublease or other agreement entered into with

such public corporation or officer, or in the event that such facility

or facilities shall cease to be used for the purposes intended, then and

in either event but subject to the terms of any lease, sublease or other

agreement undertaken by the agency, such lands, and the improvements and

facilities thereon, shall revert to the people of the state of New York

with right of re-entry thereupon, and such lease or deed shall be made

subject to such conditions; provided, however, that as a condition

precedent to the exercise of such right of re-entry the state of New

York, or such public corporation or officer, shall pay to the agency an

amount equal to the purchase price of such lands and improvements, the

depreciated cost of any facility or facilities constructed,

reconstructed, rehabilitated or improved thereon, and all other costs of

the agency incident to the acquisition of such lands and the financing

of construction, reconstruction, rehabilitation or improvement relating

to such facility or facilities, all as provided in the aforesaid lease,

sublease or other agreement entered into with such public corporation or

officer.

b. In the event that the agency shall determine that any portions of

the lands leased or conveyed pursuant to subdivision one hereof are in

excess of the lands needed to construct, reconstruct, rehabilitate or

improve the facility or facilities thereon for which the conveyance was

made, as provided in a lease, sublease or other agreement entered into

with such public corporation or officer, the agency may terminate its

lease with respect to such excess portions of such lands or reconvey

such excess portions to the people of the state of New York; provided,

however, that the state of New York or such public corporation or

officer shall pay to the agency an amount equal to the consideration, if

any, paid by the agency to such public corporation or officer allocable

to such excess lands and such other costs of the agency as are incident

to the acquisition of such excess lands, all as may be approved by such

public corporation or officer and the agency. Any monies so paid to the

agency shall be used and applied, subject to the provisions of any

contract with noteholders and bondholders, for the sole purpose of

paying costs and expenses of the agency incident to the financing of the

facility or facilities to be constructed, reconstructed, rehabilitated

or improved on such other portions of the land as shall have been leased

or conveyed to the agency pursuant to subdivision one hereof.

3. The attorney general shall pass upon the form and sufficiency and

manner of execution of any deed of conveyance and of any lease or

sublease of lands authorized to be given under subdivision one of this

section and the same shall not be effective unless so approved by him.

4. The cost of construction, acquisition, reconstruction,

rehabilitation or improvement of facilities undertaken by the agency

pursuant to this article may include the cost of acquisition of any land

and improvements leased or conveyed to the agency in accordance with

subdivision one of this section and the cost of the original

furnishings, equipment, machinery and apparatus determined by the

responsible public corporation or officer to be needed to furnish and

equip such facilities upon the completion of work. The agency shall have

power to acquire or lease and to hold land and improvements required for

the construction, acquisition, reconstruction, rehabilitation or

improvement of facilities undertaken by the agency pursuant to this

article and to provide the original furnishings, equipment, machinery

and apparatus determined by the responsible public corporation or

officer to be needed to furnish and equip such facilities upon the

completion of work and to issue its bonds and notes to provide

sufficient funds to pay the cost thereof.

5. Any public corporation or officer referred to in subdivision one of

this section is hereby authorized and empowered, in connection with any

lease, sublease or other agreement with the agency to which such public

corporation or officer is a party, and subject to such agreements with

third parties as may then exist, to:

(a) pledge or assign to the agency all or any portion of the revenues

and monies received or to be received by such public corporation or

officer, which may be available for the purpose of paying rentals for

the use of the facilities constructed, acquired, reconstructed,

rehabilitated or improved or to be constructed, acquired, reconstructed,

rehabilitated or improved under such agreement, so that the payment of

such rentals may be fully secured and protected; provided, however, that

such pledge or assignment shall not extend to appropriations or advances

from the state except appropriations or advances made specifically for

the purpose of paying all or any part of such rentals;

(b) use and dispose of such revenues and monies, or any portions

thereof, for the purpose of defraying, in whole or in part, (1) the cost

of acquiring any real property for the purpose of constructing,

acquiring, reconstructing, rehabilitating or improving facilities

thereon which may be constructed, acquired, reconstructed, rehabilitated

or improved by the agency pursuant to this article, (2) the cost of

financing the construction, acquisition, reconstruction, rehabilitation

or improvement of such facilities, and (3) the cost of acquiring the

original furnishings, equipment, machinery and apparatus needed to

furnish and equip such facilities upon the completion of work;

(c) set aside rental reserves and to agree to the maintenance,

regulation and disposition thereof;

(d) agree to limitations on the purposes to which the proceeds of sale

of agency notes or bonds may be applied and to the pledging of such

proceeds to secure the payment of agency notes or bonds or of any issue

thereof;

(e) agree to limitations on the making of additional leases, subleases

or agreements with the agency or with others, and the terms upon which

such additional leases, subleases or agreements may be made;

(f) recognize and give effect to such assignment, upon receipt of any

notice of assignment by the agency of any such lease, sublease or other

agreement with the agency, or of any of its rights under such lease,

sublease or other agreement, and to pay the assignee thereof rentals or

other payments then due or which may become due under any such lease,

sublease or other agreement which has been so assigned by the agency;

and

(g) agree to any other matters, of like or different character, which

in any way affect the security or protection of the rental payments

required to be made under the terms of such lease, sublease or other

agreement with the agency.

6. (a) Any state university facility, as defined in section

forty-seven-a of this article, which has been constructed, acquired,

reconstructed, rehabilitated or improved, in whole or in part, out of

monies advanced to the state university of New York, the state

university construction fund, the state office of general services or

the dormitory authority since August first, nineteen hundred sixty-two

pursuant to appropriations or reappropriations as advances from the

capital construction fund, and the lands upon which such a facility is

located, may be leased or conveyed to the agency by the state university

of New York, the state university construction fund or the dormitory

authority in accordance with the provisions of subdivisions one through

five of this section, notwithstanding that the construction,

acquisition, reconstruction, rehabilitation or improvement of such

facility may have been completed by the state university of New York,

the state university construction fund, the dormitory authority or the

state office of general services, or may have been undertaken or may

hereafter be undertaken by the dormitory authority under agreement with

the state university of New York or the state university construction

fund.

(b) Subject to such agreements with third parties as may then exist,

the state university of New York and the state university construction

fund are hereby authorized and empowered to enter into leases, subleases

and other agreements with the agency with respect to any state

university facility described in paragraph (a), and the lands upon which

such a facility is or may be located, in accordance with the provisions

of section three hundred seventy-eight of the education law and the

provisions of subdivisions one through five of this section; and the

agency is hereby authorized and empowered to accept any lease or

conveyance of any such state university facility, and the lands upon

which such a facility is or may be located, to acquire, construct,

reconstruct, rehabilitate or improve any such facility and to issue

bonds and notes to provide sufficient funds therefor in accordance with

the provisions of section forty-seven-a of this article and the

provisions of subdivisions one through five of this section.

(c) Any mental hygiene facility, as defined in section forty-seven-b

of this article, which has been constructed, acquired, reconstructed,

rehabilitated or improved, in whole or in part, out of monies advanced

or deemed to have been advanced to the health and mental hygiene

facilities improvement corporation, the state department of mental

hygiene or the office of general services, since April first, nineteen

hundred sixty-three pursuant to appropriations or reappropriations as

advances from the capital construction fund, and the lands upon which

such a facility is located, may be leased or conveyed to the agency by

the health and mental hygiene facilities improvement corporation or the

commissioner of mental hygiene in accordance with the provisions of

subdivisions one through five of this section, notwithstanding that the

construction, acquisition, reconstruction, rehabilitation or improvement

of such facility may have been completed by the health and mental

hygiene facilities improvement corporation, the state department of

mental hygiene or the office of general services.

(d) Subject to such agreements with third parties as may then exist,

the health and mental hygiene facilities improvement corporation is

hereby authorized and empowered to enter into leases, subleases and

other agreements with the agency with respect to any mental hygiene

facility described in paragraph (c), and the lands upon which such a

facility is or may be located, in accordance with the provisions of

subdivision four of section nine of the health and mental hygiene

facilities improvement act and the provisions of subdivisions one

through five of this section; and the agency is hereby authorized and

empowered to accept any lease or conveyance of any such mental hygiene

facility, and the lands upon which such a facility is or may be located,

to acquire, construct, reconstruct, rehabilitate or improve any such

facility, and to issue bonds and notes to provide sufficient funds

therefor in accordance with the provisions of section forty-seven-b of

this article and the provisions of subdivisions one through five of this

section.

7. a. The agency shall have the power to acquire by lease or deed from

the health and mental hygiene facilities improvement corporation any

real property acquired by the corporation pursuant to the provisions of

subdivision six of section nine of the facilities development

corporation act (i) for the purpose of constructing, reconstructing,

rehabilitating or improving thereon one or more community mental health

and developmental disabilities facilities or (ii) for the purpose of

financing the acquisition, construction, reconstruction, rehabilitation

or improvement thereon of one or more community mental health and

developmental disabilities facilities, pursuant to the provisions of

this article and the facilities development corporation act. The agency

is hereby authorized to lease or sublease such real property and

facilities thereon to the corporation for the purpose of making the same

available to a city or a county not wholly within a city, for use and

occupancy in accordance with the provisions of a lease, sublease or

other agreement between the corporation and such city or county.

b. In the event that the agency shall fail, within five years after

the date of a lease or conveyance of such real property from such city

or county to the corporation, to construct, reconstruct, rehabilitate or

improve the community mental health and developmental disabilities

facility or facility thereon for which such lease or conveyance was

made, as provided for in a lease, sublease or other agreement entered

into by such city or county and the corporation, then, subject to the

terms of any lease, sublease or other agreement undertaken by the

agency, such real property and any facilities thereon shall revert to

the corporation with right of re-entry thereupon, and such lease or deed

shall be made subject to such condition of reverter and re-entry;

provided, however, that as a condition precedent to the exercise of such

right of re-entry the corporation shall pay to the agency an amount

equal to the sum of the purchase price of such real property, the

depreciated cost of any community mental health and developmental

disabilities facility or facilities constructed, reconstructed,

rehabilitated or improved thereon and all other costs of the agency

incident to the acquisition of such lands and the financing of

construction, reconstruction, rehabilitation or improvement relating to

such community mental health and developmental disabilities facility or

facilities, all as provided in the aforesaid lease, sublease or other

agreement entered into with the corporation.

c. No real property or interest therein shall be acquired by the

agency pursuant to this subdivision unless the title thereto shall be

approved by the attorney general.

d. The attorney general shall pass upon the form and sufficiency and

manner of execution of any deed of conveyance and of any lease or

sublease of real property authorized to be acquired by the agency

pursuant to this subdivision and the same shall not be effective unless

such deed, lease or sublease shall be so approved by him.

§ 47-d — Health facilities bonds and notes

Health facilities bonds and notes. 1. Definitions. For the

purposes of section forty-seven and this section:

a. "Municipality" means a county, city or town constituting a social

services district as defined in sections two, sixty-one, seventy-five

and seventy-five-a of the social services law, or any two or more of the

foregoing which are acting jointly to provide a health facility or

health facilities.

b. "Health facility" means a building, a unit within a building, a

laboratory, a classroom, a housing unit, a dining hall, an activities

center, a library, or any structure on or improvement to real property

of any kind or description, including fixtures and equipment which are

an integral part of any such building, unit, structure or improvement, a

walkway, a roadway or a parking lot, and improvements and connections

for water, sewer, gas, electrical, telephone, heating, air conditioning

and other utility services, or a combination of any of the foregoing,

whether for patient care and treatment of staff, staff family or service

use, located at or related to or constituting a hospital of, and located

in, a municipality.

c. "Health facilities bonds" and "health facilities notes" shall mean

bonds and notes, respectively, issued by the agency pursuant to

subdivision two of this section.

d. "Health facilities improvement program" shall mean a program

undertaken by the agency and the health and mental hygiene facilities

improvement corporation for the purpose of constructing, acquiring,

reconstructing, rehabilitating or improving health facilities or causing

such facilities to be constructed, acquired, reconstructed,

rehabilitated or improved pursuant to the health and mental hygiene

facilities improvement act and this article.

2. Additional powers of the agency. In accordance with any agreement

entered into pursuant to this article and the health and mental hygiene

facilities improvement act: a. The agency shall have powers: (i) to

lease or purchase one or more existing health facilities from a

municipality and cause such facility or facilities to be reconstructed,

rehabilitated or improved by the health and mental hygiene facilities

improvement corporation, created by the health and mental hygiene

facilities improvement act, as its agent or, on any real property leased

or purchased from a municipality to cause one or more health facilities

to be constructed by the health and mental hygiene facilities

improvement corporation as its agent; (ii) to lease or purchase from any

person, firm or corporation real property for the purpose of causing

health facilities to be constructed, reconstructed, rehabilitated or

improved by the health and mental hygiene facilities improvement

corporation as its agent; (iii) to lease or sublease to a municipality

health facilities which have been constructed, acquired, reconstructed,

rehabilitated or improved by the agency pursuant to this article and the

health and mental hygiene facilities improvement act; and (iv) to do all

or any combination of the foregoing.

b. The agency shall have power and is hereby authorized from time to

time to issue negotiable bonds and notes in such principal amount as, in

the opinion of the agency, shall be necessary, after taking into account

other monies which may be available for the purpose, to provide

sufficient funds for the construction, acquisition, reconstruction,

rehabilitation or improvement of health facilities pursuant to this

subdivision two, the payment of interest on health facilities bonds and

health facilities notes issued for such purposes, the establishment of

reserves to secure such bonds and notes, and all other expenditures of

the agency incident to and necessary or convenient for any such

construction, acquisition, reconstruction, rehabilitation or

improvement, provided, however, that the agency shall not issue health

facilities bonds and health facilities notes in an aggregate principal

amount exceeding eight hundred million dollars, excluding health

facilities bonds and health facilities notes issued to refund

outstanding health facilities bonds or health facilities notes.

3. Application of other provisions of article. Except as stated in

section forty-seven, the other provisions of this article shall apply to

health facilities bonds and health facilities notes issued by the agency

pursuant to this section, provided, however, that such bonds and notes,

subject to any agreements with the holders of particular bonds or notes

pledging any specified portions thereof, shall be secured by a pledge to

the payment thereof of (i) rentals paid to the agency with respect to

health facilities financed with the proceeds of such bonds and notes,

and (ii) any other assets, monies or accounts pledged or assigned to the

agency as security for the payment of such rentals, and provided further

that no resolution or resolutions authorizing health facilities bonds

and health facilities notes shall (i) pledge all or any part of the fees

and charges made or received by the agency pursuant to subdivision

eleven of section forty-four in connection with the making of mortgage

loans or commitments therefor, or all or any part of the monies received

in payment of such mortgage loans and interest thereon, or (ii) pledge

all or any part of the mortgages of the agency or obligations securing

the same, or (iii) provide as to the use and disposition of the gross

income from mortgages owned by the agency or as to the payment of

principal of mortgages owned by the agency, or (iv) pledge all or any

part of the rentals paid to the agency under leases, subleases or other

agreements for state university facilities and mental hygiene facilities

entered into by the agency in accordance with this article, or (v)

pledge or assign all or any part of any other assets, monies or accounts

pledged or assigned to the agency as security for the payment of rentals

for such state university facilities and mental hygiene facilities.

4. Health facilities income accounts. a. The agency shall create and

establish one or more special accounts (herein referred to as health

facilities income accounts) and shall pay into such accounts any monies

which the agency shall receive in payment of rentals due under one or

more leases or subleases entered into pursuant to subdivision two of

this section and any other monies which the agency shall receive from a

municipality as security for or in payment of such rentals. Such monies

and any other monies paid into such health facilities income accounts,

may, in the discretion of the agency, but subject to agreements with the

holders of health facilities bonds and health facilities notes, be used

by the agency (1) for the repayment of advances, if any, from the state

to the agency in connection with health facilities, and any real

property required therefor, in accordance with the provisions of

repayment agreements related thereto which have been entered into with

the director of the budget, (2) to pay all costs, expenses and charges

of financing the health facilities applicable to such account or

accounts including fees and expenses of trustees and paying agents, (3)

to pay the administrative and other expenses of the agency allocable to

the services performed by the agency in the financing of the

construction, acquisition, reconstruction, rehabilitation or improvement

of health facilities and matters relating thereto, (4) for the payment

of the principal of and interest on health facilities bonds or health

facilities notes issued by the agency when the same shall become due

whether at maturity or by call for redemption and for the payment of any

redemption premium required to be paid where such bonds or notes are

redeemed prior to their stated maturities, and to purchase health

facilities bonds or health facilities notes issued by the agency, or (5)

for such other corporate purposes of the agency relating to the carrying

out of its functions, powers and duties with respect to the financing of

the construction, acquisition, reconstruction, rehabilitation or

improvement of health facilities as the agency in its discretion shall

determine and provide.

b. To assure the continued payment of rentals due under one or more

leases or subleases entered into pursuant to subdivision two of this

section, the agency shall annually, not later than November first in

each year, make and deliver to the appropriate chief fiscal officer of

the municipality a certificate setting forth the amount, if any, due and

not paid for the preceding fiscal year of the agency under such lease or

sublease with such municipality. In the event of the failure or

inability of the municipality to pay over the stated amount to the

agency on or before December first of the same year, the agency shall

forthwith make and deliver to the comptroller of the state of New York,

the director of the budget of the state of New York and the

commissioners of health and social services of the state of New York a

further certificate restating the amount due and not paid, and such

amount shall be paid over to the agency, upon the warrant of the

comptroller on vouchers certified as correct by the commissioner of

health and approved by the commissioner of social services, out of the

next payment of state aid to such municipality pursuant to section three

hundred sixty-eight-a of the social services law or funds appropriated

for the purpose of making payments on behalf of such municipality

pursuant to section three hundred sixty-seven-b of such law. To the

extent any such payments to the agency are made from state aid payments

pursuant to section three hundred sixty-eight-a of such law, the amount

of such payments shall be deducted from the corresponding apportionment

of state aid otherwise credited to such municipality, and the state

shall not be obligated to pay, nor shall such municipality be entitled

to receive, by virtue of such deduction, any additional or increased

apportionment or payment of state aid pursuant to section three hundred

sixty-eight-a of the social services law. To the extent any such

payments to the agency are made from funds appropriated for the purpose

of making payments on behalf of such municipality pursuant to section

three hundred sixty-seven-b of such law, the amount of such payments may

be deducted from any other payments of state assistance to such

municipality under the social services law and the state shall not be

obligated to pay, nor shall the municipality be entitled to receive, by

virtue of such deduction, any additional or increased apportionment or

payment of such state assistance, provided, however, that nothing

contained in this sentence shall be construed to limit, impair, impede,

or otherwise adversely affect in any manner the rights or remedies of

the purchasers and holders and owners of any bonds or notes of the state

or any agency or instrumentality, public benefit corporation or

political subdivision thereof under which such purchasers and holders

and owners have any right of payment of such bonds or notes by recourse

to such state assistance monies.

5. Special provisions. Notwithstanding any other provision of law,

general, special or local, or any provision of any charter or ordinance:

a. A municipality is hereby authorized to execute and deliver to the

agency for such consideration as may be determined by the municipality,

the agency and the health and mental hygiene facilities improvement

corporation, but not to exceed the cost of acquisition thereof to the

municipality and the cost of improvements thereon, a lease for a term

not exceeding fifty years or a quit claim deed conveying to the agency

all right, title and interest of such municipality in and to real

property, for the purpose of constructing, reconstructing,

rehabilitating, or improving one or more health facilities pursuant to

this article and the health and mental hygiene facilities improvement

act for subsequent lease or sublease to such municipality, in accordance

with the terms of any agreement entered into pursuant to this article

and the health and mental hygiene facilities improvement act.

b. A municipality is hereby authorized to lease or sublease from the

agency the health facilities constructed, reconstructed, rehabilitated

or improved pursuant to this article and the health and mental hygiene

facilities improvement act, in accordance with the terms of any

agreement entered into pursuant to this article and such act. At such

time as all rentals due or to become due to the agency pursuant to the

terms of any such lease or sublease have been paid or such lease or

sublease is terminated pursuant to the provisions thereof, the

jurisdiction of the agency over the real property leased or conveyed

pursuant to paragraph a of this subdivision, together with the

improvements thereon shall cease and all interest real and personal in

such real property and improvements vested in the agency shall vest in

the municipality with right of re-entry thereon, provided, however if

such real property were leased or conveyed to the agency by a

municipality which constituted a city social services district which

district was dissolved pursuant to the provisions of chapter

twenty-eight of the laws of nineteen hundred seventy-two, all interest

real and personal in such real property and improvements vested in the

agency shall vest in the municipality which formerly constituted the

city social services district with right of re-entry thereon.

c. No real property or interest therein shall be acquired by the

agency pursuant to this subdivision unless title thereto shall have been

approved by the attorney general.

d. The attorney general shall pass upon the form and sufficiency and

manner of execution of any deed of conveyance and of any lease or

sublease to which the agency and a municipality are parties, and the

same shall not be effective unless approved by him.

e. In the event that the agency shall fail within five years from the

date of a lease or conveyance authorized pursuant to paragraph a of this

subdivision five to construct, reconstruct, rehabilitate or improve the

health facilities thereon for which the lease or conveyance was made, as

provided for in any agreement entered into pursuant to this article and

the health and mental hygiene facilities improvement act, or in the

event that such health facilities shall cease to be used for the

purposes intended, then and in either event but subject to the terms of

any lease, sublease or other agreement between the agency and the

municipality, such real property and any health facilities thereon,

shall revert to the municipality with right of re-entry thereupon and

such lease or deed shall be made subject to such conditions; provided,

however, that as a condition precedent to the exercise of such right of

re-entry the municipality shall pay to the agency an amount equal to the

purchase price of such real property, the depreciated cost of any health

facilities constructed, reconstructed, rehabilitated or improved, and

all other costs of the agency incident to the acquisition of such real

property and the financing of construction, reconstruction,

rehabilitation or improvement relating to such facilities, all as

provided in the aforesaid lease, sublease or other agreement entered

into with such municipality.

f. In the event that the agency shall determine that any portions of

the real property leased or conveyed pursuant to paragraph a of this

subdivision five are in excess of the real property needed to construct,

reconstruct, rehabilitate or improve the facility or facilities thereon

for which the conveyance was made, as provided in any agreement entered

into pursuant to this article and the health and mental hygiene

facilities improvement act, the agency may terminate its lease with

respect to such excess portions of such real property or reconvey such

excess portions to the municipality, provided, however, that the

municipality shall pay to the agency an amount equal to the

consideration, if any, paid by the agency to such municipality allocable

to such excess real property and such other costs of the agency as are

incident to the acquisition of such excess real property, all as may be

approved by such municipality and the agency. Any monies so paid to the

agency shall be used and applied, subject to the provisions of any

contract with noteholders and bondholders, for the sole purpose of

paying costs and expenses of the agency incident to the financing of the

health facilities to be constructed, reconstructed, rehabilitated or

improved on such other portions of the real property as shall have been

leased or conveyed to the agency pursuant to paragraph a of this

subdivision five.

g. The cost of construction, acquisition, reconstruction,

rehabilitation or improvement of health facilities undertaken by the

agency pursuant to this article and the health and mental hygiene

facilities improvement act may include the cost of acquisition of any

real property leased or conveyed to the agency in accordance with

paragraph a of this subdivision five and the cost of the original

furnishings, equipment, machinery and apparatus needed to furnish and

equip such facilities upon the completion of the work. The agency shall

have power to acquire or lease and to hold real property required for

the construction, acquisition, reconstruction, rehabilitation or

improvement of the health facilities undertaken by the agency pursuant

to this article and the health and mental hygiene facilities improvement

act and to provide the original furnishings, equipment, machinery and

apparatus needed to furnish and equip such facilities upon the

completion of work and to issue its bonds and notes to provide

sufficient funds to pay the cost thereof.

h. A municipality is hereby authorized and empowered, in connection

with any lease, sublease or other agreement with the agency to which

such municipality is a party, and subject to such agreements with third

parties as may then exist, to:

(1) pledge or assign to the agency all or any portion of the revenues

and monies received or to be received by the municipality, which may be

available for the purpose of paying rentals for the use of the health

facilities constructed, acquired, reconstructed, rehabilitated or

improved under such agreement, so that the payment of such rentals may

be fully secured and protected;

(2) use and dispose of such revenues and monies, or any portions

thereof, for the purpose of defraying, in whole or in part (a) the cost

of acquiring any real property for the purpose of constructing,

acquiring, reconstructing, rehabilitating or improving facilities

thereon which may be constructed, acquired, reconstructed, rehabilitated

or improved by the agency pursuant to this article and the health and

mental hygiene facilities improvement act, (b) the cost of financing the

construction, acquisition, reconstruction, rehabilitation or improvement

of such facilities, and (c) the cost of acquiring the original

furnishings, equipment, machinery and apparatus needed to furnish and

equip such facilities upon the completion of the work;

(3) set aside rental reserves and to agree to the maintenance,

regulation and disposition thereof;

(4) agree to limitations on the purposes to which the proceeds of sale

of agency notes or bonds may be applied and to the pledging of such

proceeds to secure the payment of agency notes or bonds or of any issued

thereof;

(5) agree to limitations on the making of additional leases, subleases

or agreements with the agency or with others, and the terms upon which

such additional leases, subleases or agreements may be made;

(6) upon receipt of any notice of assignment by the agency of any such

lease, sublease or other agreement with the agency, or of any of its

rights under such lease, sublease or other agreement, recognize and give

effect to such assignment and to pay the assignee thereof rentals or

other payments then due or which may become due under any such lease,

sublease or other agreement which has been so assigned by the agency;

and

(7) agree to any other matters, of like or different character, which

in any way affect the security or protection of the rental payments

required to be made under the terms of such lease, sublease or other

agreement with the agency.

§ 47-e — Housing program bonds and notes

Housing program bonds and notes. 1. Definitions. For the

purposes of this section and paragraph (c) of subdivision one of section

forty-seven of this chapter:

(a) "Housing program" shall mean the housing assistance projects or

programs funded from an appropriation or an apportionment to the:

(1) housing assistance fund created by section ninety-two-q of the

state finance law;

(2) the affordable housing corporation and deposited in the affordable

housing development account established pursuant to section fifty-nine-b

of this chapter;

(3) the housing trust fund corporation and deposited in the housing

trust fund account established pursuant to section fifty-nine-a of this

chapter; and

(4) the homeless housing and assistance account established pursuant

to section fifty-nine-i of this chapter.

(5) Housing project repair fund created by section sixty of this

chapter.

(b) "Housing program bonds and housing program notes" shall mean bonds

and notes issued by the agency pursuant to subdivision two of this

section.

(c) "Code" shall mean the federal internal revenue code.

2. (a) Subject to the provisions of chapter fifty-nine of the laws of

two thousand, in order to enhance and encourage the promotion of housing

programs and thereby achieve the stated purposes and objectives of such

housing programs, the agency shall have the power and is hereby

authorized from time to time to issue negotiable housing program bonds

and notes in such principal amount as shall be necessary to provide

sufficient funds for the repayment of amounts disbursed (and not

previously reimbursed) pursuant to law or any prior year making capital

appropriations or reappropriations for the purposes of the housing

program; provided, however, that the agency may issue such bonds and

notes in an aggregate principal amount not exceeding eighteen billion

eighty-four million seven hundred sixty-four thousand dollars

$18,084,764,000, excluding bonds issued after April first, two thousand

twenty-five to (i) fund one or more debt service reserve funds, (ii) pay

costs of issuance of such bonds, and (iii) refund or otherwise repay

such bonds or notes previously issued, provided that nothing herein

shall affect the exclusion of refunding debt issued prior to such date.

No reserve fund securing the housing program bonds shall be entitled or

eligible to receive state funds apportioned or appropriated to maintain

or restore such reserve fund at or to a particular level, except to the

extent of any deficiency resulting directly or indirectly from a failure

of the state to appropriate or pay the agreed amount under any of the

contracts provided for in subdivision four of this section.

(b) In computing for the purposes of this section the aggregate amount

of bonds and notes of the agency issued pursuant to this section, there

shall be excluded (i) the amount of bonds and notes issued that would

constitute interest under the code, and (ii) the amount of bonds and

notes issued to refund bonds and notes, provided, that the amount so

excluded under this subparagraph (ii) may exceed the amount of the bonds

and notes which the refunding bonds or notes were issued to refund only

if the present value of the aggregate debt service on the refunding

bonds or notes does not exceed the present value of the aggregate debt

service of the bonds or notes to be refunded, such present value in each

case to be calculated by using the effective interest rate of the

refunding bonds or notes, which shall be that rate arrived at by

doubling the semi-annual interest rate (compounded semi-annually)

necessary to discount the debt service payments on the refunding bonds

or notes from the payment date thereof to the date of issue of the

refunding bonds or notes and to the price bid therefor, or to the

proceeds received by the agency from the sale thereof, in each case

including estimated accrued interest.

(c) The agency shall annually prepare and approve a bond sale report

which shall include the agency's bond sale guidelines, amendments to

such guidelines since the last agency report, and, if necessary, an

explanation of the bond sale guidelines and the results of any sale

including, but not limited to, the underwriter's discount and net

interest costs of bonds sold during the fiscal year. Such bond sale

report shall also identify which of the agency's bond sales were

conducted as public sales and which were conducted as private sales and

of those, which were taxable, and describe the participation of minority

and women-owned business enterprise firms in such sales. Such bond sale

report may be part of any other annual report that the agency is

required to make. The agency shall annually submit its bond sale report

to the comptroller and copies thereof to the senate finance committee

and the assembly ways and means committee. The agency shall make

available to the public copies of its bond sale report upon reasonable

request therefor. Nothing contained in this subdivision shall be deemed

to alter, affect the validity of, modify the terms of or impair any

contract or agreement made or entered into in violation of, or without

compliance with, the provisions of this subdivision.

(d) The bonding authority granted by this section and the issuance of

bonds for the purposes described therein shall in no way act to:

(i) delay or impede the obligation, encumbrance and timely

disbursement of funds appropriated or reappropriated for the housing

program, or any financial commitments made pursuant to such program as

defined in this section;

(ii) impair or impede the continued operation and administration of

such program by the agency, any of its subsidiaries or the division of

housing and community renewal pursuant to law and rules and regulations

thereby established.

3. Subject to any agreements with the holders of particular bonds or

notes pledging any specified portions thereof, the housing program bonds

and notes shall be secured by a pledge to the payment thereof of the

state payments made pursuant to the service contracts referred to in

subdivision four of this section.

4. (a) Notwithstanding the provisions of any general or special law to

the contrary, and subject to the making of annual appropriations

therefor by the legislature, in order to assist the agency and its

subsidiary corporations in undertaking and providing services with

respect to housing programs and in consideration of the undertaking

thereof and the benefits to be derived therefrom by the people of the

state, the director of the budget is authorized in any state fiscal year

to enter into one or more service contracts, none of which shall exceed

thirty years in duration, with the agency, upon such terms as the

director of the budget and the agency agree, so as to provide annually

to the agency in the aggregate a sum not to exceed the annual debt

service payments required for the bonds and notes issued pursuant to

this section.

(b) Any service contract entered into pursuant to paragraph (a) of

this subdivision shall provide that the obligation of the director of

the budget or of the state to fund or to pay the amounts therein

provided for shall not constitute a debt of the state within the meaning

of any constitutional or statutory provision and shall be deemed

executory only to the extent of moneys available and that no liability

shall be incurred by the state beyond the moneys available for the

purpose, and that such obligation is subject to annual appropriation by

the legislature.

(c) Any such contract or any payments made or to be made thereunder

may be assigned and pledged by the agency as security for its bonds and

notes authorized by this section.

5. (a) Subject to the provisions of chapter fifty-nine of the laws of

two thousand, upon the issuance of housing program bonds or notes, the

agency shall apply such amount of the proceeds thereof as shall be

designated and specified in the bond or note resolution or resolutions

authorizing the issuance of such bonds or notes to the specific funds

and/or accounts of one or more housing programs. The bond resolution or

resolutions authorizing the issuance of such bonds or notes shall only

allocate net proceeds of bonds or notes to a particular fund or account

of a housing program if the legislature has authorized pursuant to law

or any prior year an advance to such fund or account, and the amount of

such bond or note proceeds so allocated to such fund or account shall

not exceed the total amount so authorized to be advanced. Such proceeds

shall be disbursed to such a fund or account in accordance with such

allocation only for application to the repayment of advances previously

or thereupon made and not previously repaid. Such proceeds may not be

transferred from an entity authorized to administer a housing program to

the state or a fund of the state, except in repayment of such advances.

Except in the case of refunding bonds or notes authorized hereunder, any

net proceeds not so allocated or disbursed shall be utilized first to

pay debt service on the applicable bonds or notes in the current or the

succeeding fiscal year and second to the redemption of such bonds;

provided that such application may be adjusted to comply with applicable

federal law as to federal tax exemption. For purposes of this paragraph,

earnings from the investment of net proceeds shall be treated as net

proceeds.

(b) Each of the entities authorized to administer the respective

housing programs is hereby authorized to accept advances of funds

referred to in paragraph (a) of this subdivision and to apply any such

advances in such manner authorized by law and to repay any such advances

from the proceeds of housing program bonds or notes deposited therewith

pursuant to paragraph (a) of this subdivision.

(c) The state comptroller is hereby authorized to receive from the

agency repayments of moneys, if any, advanced by the state for purposes

of the housing program and to deposit the same to the credit of the

capital projects fund, the housing program fund, the housing assistance

fund or other appropriate fund.

§ 48 — Agreement with the state

Agreement with the state. The state does hereby pledge to and

agree with the holders of any notes or bonds issued under this article,

that the state will not limit or alter the rights hereby vested in the

agency to fulfill the terms of any agreements made with the holders

thereof, or in any way impair the rights and remedies of such holders

until such notes or bonds, together with the interest thereon, with

interest on any unpaid installments of interest, and all costs and

expenses in connection with any action or proceeding by or on behalf of

such holders, are fully met and discharged. The agency is authorized to

include this pledge and agreement of the state in any agreement with the

holders of such notes or bonds.

§ 49 — State's right to require redemption of bonds

State's right to require redemption of bonds. Notwithstanding

and in addition to any provisions for the redemption of bonds which may

be contained in any contract with the holders of the bonds, the state

may, upon furnishing sufficient funds therefor, require the agency to

redeem, prior to maturity, as a whole, any issue of bonds on any

interest payment date not less than twenty years after the date of the

bonds of such issue at one hundred five per centum of their face value

and accrued interest or at such lower redemption price as may be

provided in the bonds in case of the redemption thereof as a whole on

the redemption date. Notice of such redemption shall be published in at

least two newspapers publishing and circulating respectively in the

cities of Albany and New York at least twice, the first publication to

be at least thirty days before the date of redemption. The provisions of

this section relating to the state's right to require redemption of

bonds, shall not apply to state-supported debt, as defined in section

sixty-seven-a of the state finance law, issued by the agency. Such

agency bonds shall remain subject to redemption pursuant to any contract

with the holders of such bonds.

§ 50 — Remedies of noteholders and bondholders

Remedies of noteholders and bondholders. 1. In the event that

the agency shall default in the payment of principal of or interest on

any issue of notes or bonds after the same shall become due, whether at

maturity or upon call for redemption, and such default shall continue

for a period of thirty days, or in the event that the agency shall fail

or refuse to comply with the provisions of this article, or shall

default in any agreement made with the holders of any issue of notes or

bonds, the holders of twenty-five per centum in aggregate principal

amount of the notes or bonds of such issue then outstanding, by

instrument or instruments filed in the office of the clerk of the county

of Albany and approved or acknowledged in the same manner as a deed to

be recorded, may appoint a trustee to represent the holders of such

notes or bonds for the purposes herein provided.

2. Such trustee may, and upon written request of the holders of

twenty-five per centum in principal amount of such notes or bonds then

outstanding shall, in his or its own name:

(a) by action or special proceeding in accordance with the civil

practice law and rules, enforce all rights of the noteholders or

bondholders, including the right to require the agency to collect fees

and charges and interest and amortization payments on mortgage loans

made by it adequate to carry out any agreement as to, or pledge of, such

fees and charges and interest and amortization payments on such

mortgages, and other properties and to require the agency to carry out

any other agreements with the holders of such notes or bonds and to

perform its duties under this title;

(b) bring suit upon such notes or bonds;

(c) by action or special proceeding require the agency to account as

if it were the trustee of an express trust for the holders of such notes

or bonds;

(d) by action or special proceeding enjoin any acts or things which

may be unlawful or in violation of the rights of the holders of such

notes or bonds;

(e) declare all such notes or bonds due and payable, and if all

defaults shall be made good, then, with the consent of the holders of

twenty-five per centum of the principal amount of such notes or bonds

then outstanding, to annul such declaration and its consequences.

3. Such trustee shall in addition to the foregoing have and possess

all of the powers necessary or appropriate for the exercise of any

functions specifically set forth herein or incident to the general

representation of bondholders or noteholders in the enforcement and

protection of their rights.

4. The supreme court shall have jurisdiction of any suit, action or

proceeding by the trustee on behalf of such noteholders or bondholders.

The venue of any such suit, action or proceeding shall be laid in the

county of Albany.

5. Before declaring due and payable the principal of notes or bonds

issued in connection with any mortgage or other obligation securing a

mortgage loan made by the agency, the trustee shall first give thirty

days' notice in writing to the governor, to the agency, to the

commissioner of housing and community renewal, the state commissioner of

health, the state commissioner of mental hygiene or the state

commissioner of social services, as the case may be, and to the attorney

general of the state.

§ 51 — Monies of the agency

Monies of the agency. 1. All monies of the agency, except as

otherwise authorized or provided in this article, shall be paid to the

commissioner of taxation and finance as agent of the agency, who shall

not commingle such monies with any other monies. Such monies shall be

deposited in a separate bank account or accounts. The monies in such

accounts shall be paid out on checks signed by the commissioner of

taxation and finance on requisition of the chairman of the agency or of

such other officer or employee or officers or employees as the agency

shall authorize to make such requisition. All deposits of such monies

shall, if required by the commissioner of taxation and finance or the

agency, be secured by obligations of the United States or of the state

of a market value equal at all times to the amount of the deposit and

all banks and trust companies are authorized to give such security for

such deposits.

Notwithstanding the provisions of this section, the agency shall have

power, subject to the approval of the commissioner of taxation and

finance, to contract with the holders of any of its notes or bonds, as

to the custody, collection, securing, investment, and payment of any

monies of the agency, of any monies held in trust or otherwise for the

payment of notes or bonds, and to carry out such contract. Monies held

in trust or otherwise for the payment of notes or bonds or in any way to

secure notes or bonds and deposits of such monies may be secured in the

same manner as monies of the agency, and all banks and trust companies

are authorized to give such security for such deposits.

2. Subject to agreements with noteholders and bondholders and the

approval of the comptroller, the agency shall prescribe a system of

accounts.

3. The comptroller, or his legally authorized representative, is

hereby authorized and empowered from time to time to examine the books

and accounts of the agency including its receipts, disbursements,

contracts, reserve funds, sinking funds, investments, and any other

matters relating to its financial standing. Such an examination shall be

conducted by the comptroller at least once in every five years; the

comptroller is authorized, however, to accept from the agency, in lieu

of such an examination, an external examination of its books and

accounts made at the request of the agency.

4. The agency shall submit to the governor, chairman of the senate

finance committee, chairman of the assembly ways and means committee and

the comptroller, within thirty days of the receipt thereof by the

agency, a copy of the report of every external examination of the books

and accounts of the agency other than copies of the reports of such

examinations made by the comptroller.

§ 51-a — Federal rental assistance program administrative fees

Federal rental assistance program administrative fees. All

administrative fee monies received by the agency from the federal

government pursuant to section eight of the United States housing act of

1937, as amended by the Housing and Community Development Act of 1974

and subsequent amendments, shall be allocated according to the following

schedule:

1. ninety percent of such fees shall be allocated to the

not-for-profit corporations or local government agencies providing

services under such section eight;

2. ten percent of such fees shall be retained by the state and unless

otherwise allocated pursuant to an agreement between the agency and the

division of housing and community renewal:

(a) ninety-five percent of such amount shall be allocated to the

division of housing and community renewal; and

(b) five percent shall be retained by the agency.

§ 52 — Notes and bonds as legal investment

Notes and bonds as legal investment. The notes and bonds of the

agency are hereby made securities in which all public officers and

bodies of this state and all municipalities and municipal subdivisions,

all insurance companies and associations, and other persons carrying on

an insurance business, all banks, bankers, trust companies, savings

banks and savings associations, including savings and loan associations,

building and loan associations, investment companies and other persons

carrying on a banking business, all administrators, guardians,

executors, trustees and other fiduciaries, and all other persons

whatsoever who are now or may hereafter be authorized to invest in bonds

or other obligations of the state, may properly and legally invest

funds, including capital, in their control or belonging to them.

§ 53 — Exemption from taxation of property and income

Exemption from taxation of property and income. The property of

the agency and its income and operations shall be exempt from taxation.

§ 54 — Exemption from taxation of notes and bonds

Exemption from taxation of notes and bonds. It is hereby

determined that the creation of the agency is in all respects for the

benefit of the people of the state and for the improvement of their

health, safety, welfare, comfort and security, and that said purposes

are public purposes and that the agency will be performing an essential

governmental function in the exercise of the powers conferred upon it by

this article. The state covenants with the purchasers and all subsequent

holders and transferees of notes and bonds issued by the agency, in

consideration of the acceptance of and payment for the notes and bonds,

that the notes and bonds of the agency, issued pursuant to this article

and the income therefrom and all its fees, charges, gifts, grants,

revenues, receipts, and other monies received or to be received, pledged

to pay or secure the payment of such notes or bonds shall at all times

be free from taxation, except for estate and gift taxes and taxes on

transfers.

§ 55 — Assistance by state officers, departments, boards and commissions

Assistance by state officers, departments, boards and

commissions. 1. The department of audit and control, department of law,

commissioner of housing and division of housing, and all other state

officers, departments, boards, divisions and commissions may render such

services to the agency within their respective functions as may be

requested by the agency.

2. The commissioner of housing and community renewal and the division

of housing and community renewal are hereby designated to act for and in

behalf of the agency in servicing the mortgage loans and equity loans of

the agency, except mortgage loans made to hospital corporations which

are eligible borrowers as defined in article twenty-eight-B of the

public health law, nursing home companies, non-profit corporations which

are eligible borrowers as defined in title five-A of article six of the

social services law, or companies incorporated pursuant to the

not-for-profit corporations law and article seventy-five of the mental

hygiene law, and in carrying out the provisions of section forty-four-a

of this article, and shall perform such functions and services in

connection with the making, servicing and collection of such loans and

pursuant to such section forty-four-a of this article as shall be

requested by the agency. The agency shall pay to the division of housing

and community renewal from any of the monies available for such purpose,

such amounts as are necessary to reimburse it for the reasonable costs

of the services performed by the commissioner of housing and community

renewal and the division of housing and community renewal pursuant to

this section.

3. The state commissioner of health and the state department of health

are hereby designated to act for and in behalf of the agency in

servicing the nursing home company mortgage loans of the agency and the

mortgage loans of the agency to hospital corporations which are eligible

borrowers as defined in article twenty-eight-B of the public health law,

and shall perform such functions and services in connection with the

making, servicing and collection of such loans as shall be requested by

the agency. The agency shall pay to the department of health from any

monies of the agency available for such purpose, such amounts as are

necessary to reimburse the department of health for the reasonable cost

of the services performed by the commissioner of health and department

of health pursuant to this section.

4. The state commissioner of social services and the state department

of social services are hereby designated to act for and in behalf of the

agency in servicing the youth facilities project mortgage loans of the

agency and shall perform such functions and services in connection with

the making, servicing and collection of such loans as shall be requested

by the agency. The agency shall pay to the department of social services

from any monies of the agency available for such purpose, such amounts

as are necessary to reimburse the department of social services for the

reasonable cost of the services performed by the commissioner of social

services and department of social services pursuant to this section.

5. The state commissioner of mental hygiene and the state department

of mental hygiene are hereby designated to act for and in behalf of the

agency in servicing the community mental health services and

developmental disabilities services companies mortgage loans of the

agency and shall perform such functions and services in connection with

the making, servicing and collection of such loans as shall be requested

by the agency. The agency shall pay to the department of mental hygiene

from any monies of the agency available for such purpose, such amounts

as are necessary to reimburse the department of mental hygiene for the

reasonable cost of the services performed by the commissioner of mental

hygiene and department of mental hygiene pursuant to this section,

including such amounts as are necessary to reimburse the health and

mental hygiene facilities improvement corporation for the reasonable

cost of such services performed by the health and mental hygiene

facilities improvement corporation upon request by the commissioner of

mental hygiene pursuant to the provisions of section 75.25 of the mental

hygiene law.

6. The department of social services of the state of New York is

hereby designated to act for and in behalf of the agency in servicing

the community senior citizens centers and services companies mortgage

loans of the agency and shall perform such functions and services in

connection with the making, servicing and collection of such loans as

shall be requested by the agency. The agency shall pay to such

department from any moneys of the agency available for such purposes,

such amounts as are necessary to reimburse such department for the

reasonable cost of the services performed by such department pursuant to

this section.

§ 56 — Reports

* § 56. Reports. 1. The agency shall submit to the governor, the

chairman of the senate finance committee, the chairman of the assembly

ways and means committee, the comptroller and the director of the budget

within ninety days after the end of its fiscal year, a complete and

detailed report setting forth: (1) its operations and accomplishments;

(2) its receipts and expenditures during such fiscal year in accordance

with the categories or classifications established by the agency for its

operating and capital outlay purposes, including a listing of all

private consultants engaged by the agency on a contract basis and a

statement of the total amount paid to each such private consultant; (3)

its assets and liabilities at the end of its fiscal year, including a

schedule of its mortgage loans and commitments and the status of

reserve, special or other funds; and (4) a schedule of its bonds and

notes outstanding at the end of its fiscal year, together with a

statement of the amounts redeemed and incurred during such fiscal year.

2. The agency shall provide the commissioner of housing and community

renewal, on a timely basis, with the data and other information

necessary to compile the report or reports required pursuant to section

twenty of the public housing law.

* NB Effective until July 23, 2027

* § 56. Annual report. The agency shall submit to the governor, the

chairman of the senate finance committee, the chairman of the assembly

ways and means committee, the comptroller and the director of the budget

within ninety days after the end of its fiscal year, a complete and

detailed report setting forth: (1) its operations and accomplishments;

(2) its receipts and expenditures during such fiscal year in accordance

with the categories or classifications established by the agency for its

operating and capital outlay purposes, including a listing of all

private consultants engaged by the agency on a contract basis and a

statement of the total amount paid to each such private consultant; (3)

its assets and liabilities at the end of its fiscal year, including a

schedule of its mortgage loans and commitments and the status of

reserve, special or other funds; and (4) a schedule of its bonds and

notes outstanding at the end of its fiscal year, together with a

statement of the amounts redeemed and incurred during such fiscal year.

* NB Effective July 23, 2027

§ 56-a — Indemnification of members, officers and employees

Indemnification of members, officers and employees. The state

shall save harmless and indemnify the respective members, officers and

employees of the agency and its subsidiary corporations pursuant to

section seventeen of the public officers law against any claim, demand,

suit or judgment arising by reason of any act or omission to act by such

member, officer or employee occurring in the discharge of his duties and

within the scope of his service on behalf of the agency or its

subsidiary corporations. In the event of any claim, demand, suit or

judgment based on allegations that financial loss was sustained by any

person in connection with the acquisition, disposition or holding of

notes, bonds or other obligations of the agency, a member, officer or

employee of the agency shall be saved harmless and indemnified

notwithstanding any limitations contained in such section seventeen,

unless such individual is found by a final judicial determination not to

have acted, in good faith, for a purpose which he reasonably believed to

be in the best interests of the agency or not to have had reasonable

cause to believe that his conduct was lawful. All of the provisions of

section seventeen of the public officers law which are not inconsistent

with this section shall apply to the members, officers and employees of

the agency or its subsidiary corporations, including the provisions

relating to the defense by the attorney general or private counsel of

any civil action and the payment of legal costs incurred in connection

with the defense of any such action. Any member, officer or employee of

the agency or its subsidiary corporations seeking to be saved harmless

or indemnified or to claim any other benefits available pursuant to this

section or section seventeen of the public officers law shall comply

with the procedural requirements of such section seventeen. As used in

this section the terms "member", "officer" and "employee" shall include

a former member, officer or employee, his estate or judicially appointed

personal representative.

§ 57 — Insured mortgage reserve fund

Insured mortgage reserve fund. 1. The agency shall create and

establish a special fund, to be known as the insured mortgage reserve

fund, and shall pay into such fund all monies appropriated and made

available by the state for the purposes of such fund and any other

monies from any other source or sources available therefor. The monies

held in such fund shall be used (1) to meet the agency's obligations

under an agreement with the federal government pursuant to subdivision

twenty-eight of section forty-four of this article, (2) to meet the

agency's obligations to pay the principal of and interest on notes

issued for the purpose of making a mortgage loan to a company which

mortgage loan or a subsequent mortgage loan to such company has been

insured by the federal government, only however to the extent that all

other revenues of the agency, including the proceeds of any sale,

assignment or other disposition of a mortgage loan insured by the

federal government, available for such purposes are not sufficient to

meet such obligations of the agency, (3) to establish escrow accounts as

may be required by the federal government as a condition for the

issuance of mortgage insurance, (4) to pay for installation of such life

safety devices as may be required by the federal government which

devices are in addition to and not in substitution for any requirement

heretofore imposed on the company, and (5) to pay closing costs arising

out of the company's obtaining mortgage insurance from the federal

government. Any income or interest earned by, or increment to the

insured mortgage reserve fund may be used for authorized purposes

including, but not limited to, the addition of such income or interest

earned, or increment to the monies held in such fund for the purposes

herein provided, the repayment of appropriation expenditures made to the

credit of such fund, or to secure the payment of the principal of and

interest on notes or revenue housing bonds. Any portion of the monies

held in such fund shall, if the federal government so requires, be

segregated from any other portion thereof and applied solely to meet the

agency's obligations under any agreement made pursuant to subdivision

twenty-eight of section forty-four, provided that the amount so

segregated shall not exceed the maximum obligation under any such

contract or contracts.

§ 58 — Special revenue housing coverage reserve funds

Special revenue housing coverage reserve funds. The agency may

create and establish one or more special funds to be known as special

revenue housing coverage reserve funds and may pay into such reserve

funds any monies appropriated and made available by the state for the

purpose of such funds and any other monies which may be made available

to the agency for the purposes of such funds from any other source or

sources. The monies held in or credited to any such fund, except as

hereinafter provided, shall be used solely for the payment of the

principal of or interest on the revenue housing bonds of the agency

secured by such fund as the same shall become due, whether at maturity

or upon call for redemption, and for the payment of any redemption

premium required to be paid when such bonds are redeemed prior to

maturity. Any income or interest earned by, or increment to any such

special revenue housing coverage reserve fund may be used for authorized

purposes including, but not limited to, the addition of such income or

interest earned, or increment to the monies held in such fund for the

purposes herein provided, or the repayment of appropriation expenditures

made to the credit of such fund.

§ 59 — Bond reserve insurance fund

Bond reserve insurance fund. The agency shall create and

establish a special fund, to be known as the bond reserve insurance fund

and shall pay into such fund all monies appropriated and made available

by the state for the purposes of such fund and any other monies which

may be made available to the agency for the purposes of such fund from

any other source or sources. All monies held in the bond reserve

insurance fund shall be used by the agency to meet the agency's

obligation to repay principal and interest on its outstanding bonds,

solely to the extent all other revenues of the agency available for such

purposes are not sufficient to meet such obligations of the agency. Any

income or interest earned by, or increment to the bond reserve insurance

fund may be used for authorized purposes including, but not limited to,

the addition of such income or interest earned, or increment to the

monies held in such fund for the purposes herein provided, or the

repayment of appropriation expenditures made to the credit of such fund.

§ 59-a — Housing trust fund account

Housing trust fund account. The housing trust fund corporation

created by section forty-five-a of this chapter shall create and

establish a special account to be known as the housing trust fund

account and shall pay into such account any moneys which may be made

available to such corporation for the purposes of such account from any

source including but not limited to moneys appropriated by and made

available pursuant to appropriation by the state and any income or

interest earned by, or increment to, the account due to the investment

thereof or loans made pursuant to article eighteen of this chapter. The

moneys held in or credited to the housing trust fund account established

under this section shall be expended solely to carry out the provisions

of article eighteen of this chapter.

§ 59-b — Affordable housing development account

Affordable housing development account. The affordable housing

corporation created by section forty-five-b of this chapter shall create

and establish a special account to be known as the affordable housing

development account and shall pay into such account any moneys which may

be made available to such corporation for the purposes of such account

from any source including but not limited to moneys appropriated by and

made available pursuant to appropriation by the state and any income or

interest earned by, or increment to, the account due to the investment

thereof or loans made pursuant to article nineteen of this chapter. The

moneys held in or credited to the affordable housing development account

established under this section shall be expended solely to carry out the

provisions of article nineteen of this chapter.

§ 59-c — Insured housing initiatives fund

Insured housing initiatives fund. 1. The agency shall create

and establish a special fund to be known as the insured housing

initiatives fund and shall pay into such fund any moneys which may be

made available to the agency for the purposes of such fund from any

source, including, but not limited to, moneys appropriated by and made

available pursuant to appropriation by the state and any income or

interest earned by, or increment to, the fund due to the investment

thereof or moneys payable to the agency under any contract entered into

pursuant to subdivision two of this section. Subject to the provisions

of any contract with bondholders and noteholders and any contract

authorized pursuant to this section for the provision of insurance,

letters of credit or other financial mechanisms, the moneys held in or

credited to the insured housing initiatives fund established under this

subdivision, in the discretion of the agency, shall be used by the

agency in accordance with subdivision two of this section to enable it

to reduce the debt service that would otherwise be payable by the agency

on its bonds, notes and other obligations issued to make loans pursuant

to subdivision twenty-nine-a of section forty-four of this article, and

thereby to reduce the obligations of the borrower to the agency. The

reduction in debt service as a result of any contract entered into

pursuant to subdivision two of this section shall result solely in the

reduction of rents payable by low income individuals or families

residing in those units in the housing development assisted by the fund

that are required to be occupied by such individuals or families for

interest on obligations issued to finance such housing development to be

exempt from taxation pursuant to section 103(b)(4) of the internal

revenue code of 1954, as amended. Provided, however, to the extent that

such rents for such units are affordable to persons or families whose

income is not in excess of sixty-five percent of median income for the

area, as defined by the agency, then any remaining savings or benefits

shall be applied to the further reduction of such rents for such units,

and/or the reduction of rents payable by other low income individuals or

families residing in the housing development assisted by such fund

and/or the increase in the occupancy of low income individuals or

families residing in such housing development in excess of that required

pursuant to section 103(b)(4) of the internal revenue code of 1954, as

amended.

2. The agency may enter into contracts for the provision of insurance,

letters of credit or other financial mechanisms designed to reduce such

debt service on bonds, notes and other obligations of the agency in

accordance with this section, so long as such obligations receive an

investment grade rating from a recognized rating agency. The moneys held

in or credited to the fund shall not be used to pay the principal of or

interest on such obligations of the agency, the principal of or interest

on the obligations of the borrower to the agency or any fees of the

agency.

3. For the purposes of this section, "low income individuals or

families" shall mean persons or families with incomes of no more than

eighty percent of the median income for the area, as defined by the

agency.

4. The agency shall account separately for all moneys received by the

fund.

§ 59-d — Turnkey/enhanced housing account

Turnkey/enhanced housing account. The housing trust fund

corporation created by section forty-five-a of this article shall create

and establish a special account to be known as the "turnkey/enhanced

housing account" and shall pay into such account any moneys which may be

made available to such corporation for the purposes of such account from

any source including but not limited to moneys appropriated by and made

available pursuant to appropriation by the state and any income or

interest earned by, or increment to, the account due to the investment

thereof or loans made from the account pursuant to article eighteen-A of

this chapter. The moneys held in or credited to the turnkey/enhanced

housing account established under this section shall be expended solely

to carry out the provisions of and to pay expenses associated with

article eighteen-A of this chapter.

§ 59-e — Infrastructure development fund

Infrastructure development fund. The agency shall create and

establish a special fund to be known as the "infrastructure development

fund" and shall pay into such fund any moneys which may be made

available to the corporation for the purposes of such fund from any

source, including but not limited to moneys appropriated by and made

available pursuant to appropriation by the state and any income or

interest earned by, or increment to, the fund due to the investment

thereof. The moneys held in or credited to the fund shall be expended

solely to carry out the provisions of and to pay expenses associated

with article twenty-one of this chapter.

§ 59-g — Permanent housing for homeless families fund

Permanent housing for homeless families fund. The agency shall

create and establish a special fund to be known as the "permanent

housing for homeless families fund" and shall pay into such fund any

moneys which may be made available to the agency for the purposes of

such fund from any source, including but not limited to moneys

appropriated by and made available pursuant to appropriation by the

state and moneys made available by cities with a population of one

million or more and any income or interest earned by, or increment to,

the fund due to the investment thereof. The moneys held in or credited

to the fund shall be expended solely to carry out the provisions of and

to pay expenses associated with article three-A of this chapter.

§ 59-h — Manufactured home cooperative fund

Manufactured home cooperative fund. The agency shall create

and establish a special fund to be known as the manufactured home

cooperative fund and shall pay into such fund any moneys which may be

made available to such agency for the purposes of such fund from any

source including but not limited to moneys appropriated by and made

available pursuant to appropriation by the state, civil penalties

imposed pursuant to subdivision v of section two hundred thirty-three of

the real property law and any income or loan repayments or interest

earned by, or increment to, the fund due to the investment thereof or

loans made pursuant to article twenty of this chapter. The moneys held

in or credited to the manufactured home cooperative fund established

under this section shall be expended solely to carry out the provisions

of article twenty of this chapter.

§ 59-i — Homeless housing and assistance account

Homeless housing and assistance account. The homeless housing

and assistance corporation created by section forty-five-c of this

chapter shall create and establish a special account to be known as the

homeless housing and assistance account and shall pay into such account

any moneys which may be made available to such corporation for the

purposes of such account from any source including but not limited to

moneys appropriated by and made available pursuant to appropriation by

the state and any income or interest earned by, or increment to, the

account due to the investment thereof. The moneys held in or credited to

the homeless housing and assistance account established under this

section shall be expended solely to carry out the provisions of title

one of article two-A of the social services law.

§ 60 — Housing project repair fund

Housing project repair fund. 1. As used in this section, (a) the

term "current economic rent" shall mean the rent or carrying charges

determined by the commissioner to be sufficient, together with monies

available to the company from the state, the federal government, or any

other source, to provide for the payment of (i) all current mortgage

interest, fees, charges, and amortization, (ii) all current real

property taxes and water and sewer charges, or payments in lieu thereof,

(iii) all other current operating expenses of the project, and (iv) all

current payments into reserve funds required by the commissioner;

provided, however, that any payments required for reserves for

replacements shall be in an amount which on an aggregate annual basis is

not less than six-tenths of one percent of the cost for constructing

such project as determined by the commissioner, except that in the case

of a project receiving payments pursuant to this section which otherwise

would be made from such reserve for replacements, the commissioner shall

take such payments into account in determining the necessary amount of

payments to reserves for replacements; and

(b) the term "total economic rent" shall mean the sum of the current

economic rent, as defined in paragraph (a) of this subdivision, plus an

amount sufficient to amortize all mortgage repayment arrearages,

including fees and charges, and all real property tax arrearages,

including applicable interest, if any, and all water and sewer charge

arrearages, including applicable interest, if any, of the company.

2. The agency shall create and establish a special fund, to be known

as the housing project repair fund and shall pay into such fund all

monies appropriated and made available to the agency by the state for

the purposes of such fund and any other monies which may be made

available to the agency for the purposes of such fund from any other

source or sources.

3. Monies held in the housing project repair fund may be used by the

agency to provide for the correction of construction-related problems in

housing projects financed by the agency by means of the necessary

repair, reconstruction or replacement of any of the facilities or site

conditions, the cost of which was included in the project cost and which

form an integral part of the project, and for such other purposes which

may be necessary to effectuate the provisions of this section. A

construction-related problem shall mean any deficiency or defect in the

design, construction or site preparation of a project, its buildings,

utilities and grounds; provided, however, a deficiency which results

from conformance to design and construction standards in effect at the

time of such construction shall not constitute such a construction

related problem. The agency shall not expend monies from the fund as

payment to any housing company for the correction of a

construction-related problem unless the following conditions have been

met:

a. The agency has either (1) received a certification by an

independent consultant with appropriate qualifications engaged by the

agency certifying (i) the scope and total cost of the corrective work

required to be performed at the project after taking into consideration

emergency conditions, if any, which may exist, and such other factors as

may be appropriate; (ii) the cost effectiveness of alternative methods

of performing the corrective work; and (iii) the extent to which the

corrective work to be performed results from a construction-related

problem, or (2) equivalent findings have been made in arbitration or

other fact finding procedures established by agreement between a housing

company, the commissioner and the agency; and

b. The agency has found and determined that (i) the projected annual

aggregate rent revenues for the project and any other monies available

to the company from the state or federal government or any other source

as certified by the commissioner constitute current economic rent, or

(ii) a mortgage modification agreement has been entered into with the

housing company which operates the project, after consultation with the

commissioner and in accordance with the guidelines approved by the

director of the budget. Such a mortgage modification agreement shall be

entered into only in the event that the agency projects that the

imposition of total economic rent will require the company to vary

rental rates or carrying charges by an amount that exceeds the rental

rates or carrying charges of a company in effect immediately prior to

the date of such a modification by the greater of twenty percentum or

ten dollars per room per month. A mortgage modification agreement may

permit the variation of rental rates or carrying charges over a period

agreed upon by the agency and the housing company not to exceed

seventy-five months from the effective date of the initial variation in

rental rates or carrying charges so as to result in the imposition of a

current economic rent level at a date no later than the beginning of the

seventy-sixth month, and shall make provision for the payment by the

housing company of all current real property taxes and water and sewer

charges, or payments in lieu thereof, and for the payment by the housing

company of (i) all real property tax arrearages, including applicable

interest, if any, over a period not to exceed fifteen years from the

effective date of the initial variation in rental rates or carrying

charges, (ii) all water and sewer charge arrearages, including

applicable interest, if any, over a period not to exceed fifteen years

from the effective date of the initial variation in rental rates or

carrying charges, (iii) all mortgage repayment arrearages, including

fees and charges, over a period not to exceed the scheduled date of the

expiration of the mortgage repayment period pursuant to the provisions

of the original mortgage and (iv) any mortgage repayment deficiencies

accumulated during the term of the mortgage modification agreement over

a period not to exceed ten years from the expiration of such agreement.

4. Monies shall not be available from the fund to reimburse a housing

company for work performed or contracted on account of which such

housing company has received a credit against monies otherwise payable

to the agency as mortgage repayments prior to the effective date of this

section, nor for work required to maintain, or correct deficiencies or

defects in, construction performed or contracted for by a municipality

or public utility, nor for work for which federal monies are available

as determined by the commissioner, and the agency shall not expend

monies beyond those required to meet the portion of the cost of

correction of a condition which constitutes a construction-related

problem, as determined by the agency; provided, however, that monies

from the fund may be used to pay for the costs associated with the

hiring of an independent consultant engaged by the agency to effectuate

the purposes of this section and for otherwise administering the

provisions of this section.

5. Notwithstanding any other provision of this section the agency

shall allocate fifteen per centum of the monies from the fund as payment

to housing companies financed by the agency or the state for energy

conservation improvements or tenant health and safety improvements

provided that the following conditions are met:

a. The agency has received a certification from the commissioner that

energy saving or other modifications to the project will either (i)

result in savings projected over a seven year term or (ii) rectify an

imminent threat to tenant health and safety, and there is no alternative

source of funding to make such modifications.

b. The agency has reviewed the findings of the commissioner and is in

agreement with such findings.

c. The agency has determined that the requirements of paragraph b of

subdivision three of this section have been satisfied.

d. The agency has determined that a plan for performing energy

conservation or tenant health and safety improvements as submitted by

the housing company is the most cost-effective alternative available to

the housing company.

The agency shall apportion such allocations among housing companies in

an equitable manner and shall not make any such allocation in a given

year to a housing company which will, in such year, receive ten percent

or more of the monies available in the fund for the correction of

construction-related problems.

6. To assist in the administration of this section, the agency is

authorized to request the assistance of and utilize the services of any

state department, agency, board, commission or public benefit

corporation, and any such department, agency, board, commission or

public benefit corporation is authorized to provide such assistance and

service.

7. Nothing contained in this section or in the administration or

application hereof shall be construed as creating any private right of

action on the part of any persons, firm or corporation against the state

of New York, the agency, the division of housing and community renewal,

or any officer or employee thereof based upon a construction-related

problem and neither the certification or finding of the existence of a

construction-related problem as provided in this section nor the

implementation of the provisions of this section may be asserted as a

defense by way of answer, counterclaim, or otherwise in any action or

proceeding brought to enforce the provisions of a mortgage or any

related agreement made by the agency with respect to a project, or

brought by the commissioner with respect to a project, or brought by the

commissioner to enforce any of the provisions of this chapter or any

order made by him pursuant to this chapter. In any case where monies

held in the housing project repair fund have been expended to provide

for the correction of any construction-related problem, the agency shall

accede to any and all rights and remedies which the housing company on

whose behalf such payment was made may have against any third party with

respect to any such construction-related problem to the extent of such

payment.

8. Notwithstanding any other provisions of this section, no monies

shall be expended from the housing project repair fund unless the agency

has submitted a plan to the director of the budget and the comptroller

describing the work required to repair the construction-related or other

problem, or problems, which also describes the method to be used for the

awarding of contracts for such work, and the director of the budget and

the comptroller have approved the plan and all contracts let pursuant

thereto as being in accordance with the provisions of this section and

in accordance with subdivision two of section one hundred twelve of the

state finance law. In addition, no monies shall be expended from the

housing project repair fund unless the director of the budget has

approved a plan detailing the scheduling of the work to be performed to

repair any such construction-related or other problem or problems and

the scheduling of the payments for total cost of the work to be

performed. In addition, no monies in excess of the total cost of any

corrective work certified in accordance with paragraph a of subdivision

three of this section shall be expended from such fund without the

approval of the director of the budget.

9. Notwithstanding any other law, no monies shall be provided pursuant

to this section unless a company shall require the tenants and occupants

residing in the housing project or projects to submit an annual income

affidavit as prescribed by the commissioner or the supervising agency,

as the case may be, together with proper documentation as and if

prescribed by the commissioner or the supervising agency, as the case

may be. Upon submission of such affidavit and documentation, if any, the

company shall assess such tenant or occupant the rental surcharge, if

applicable, prescribed pursuant to section thirty-one of this chapter on

the basis of the verified income of such tenant or occupant. If the

tenant or occupant shall fail to submit such affidavit and

documentation, or if such verification shall result in a disagreement

caused by understatement of income and the tenant shall have failed to

correct such original affidavit and documentation on forms specified by

the commissioner within sixty days of notification by certified mail by

the commissioner addressed to the tenant, the commissioner shall so

notify the company. Thereupon, the company shall assess such tenant or

occupant the maximum rental surcharge permitted pursuant to section

thirty-one of this chapter, and provided further, that the company, with

the approval of the commissioner or the supervising agency, as the case

may be, may proceed to remove said tenant or occupant from occupancy on

the ground that said tenant or occupant has materially misrepresented

income. The failure of the tenant to accurately verify such income shall

be prima facie evidence that such material misrepresentation was made by

the tenant. The provisions of any other law to the contrary

notwithstanding, solely for the purpose of verification of income, the

commissioner or the supervising agency, as the case may be, may contract

with the department of taxation and finance for services performed by

such department in verifying income information forwarded by a company,

the commissioner, or the supervising agency to such department. Nothing

contained herein shall be construed to authorize the commissioner to

contract with such department to provide any income information

whatsoever and such agreement shall be limited solely to the

verification of income information. No officer or employee of the

division of housing and community renewal, the supervising agency, or a

company shall be subject to any civil or criminal liability by reason of

his forwarding to the department of taxation and finance of any income

information pursuant to this subdivision, unless (i) such information is

knowingly and willfully materially misrepresented by such officer or

employee or (ii) such information is knowingly and willfully divulged to

any person, except in the discharge of such officer's or employee's

duties solely for the purpose of verification of income, for any reason

whatsoever. The commissioner or the supervising agency as the case may

be, shall promulgate rules and regulations to effect the provisions of

this subdivision. The provisions of the state freedom of information act

shall not apply to any income information obtained by a company, the

commissioner, or the supervising agency, as the case may be, pursuant to

the provisions of this subdivision.

§ 61 — Inconsistent provisions in other laws superseded

Inconsistent provisions in other laws superseded. Insofar as the

provisions of this article are inconsistent with the provisions of any

other law, general, special or local, the provisions of this article

shall be controlling.

§ 61-a — Actions

Actions. Except in an action for wrongful death, in any case

founded upon tort a notice of claim shall be required as a condition

precedent to the commencement of an action or special proceeding against

the agency, any of its subsidiary corporations, or any officer,

appointee or employee thereof, and the provisions of section fifty-e of

the general municipal law shall govern the giving of such notice. No

such action shall be commenced more than one year and ninety days after

the cause of action therefor shall have accrued. An action for wrongful

death shall be commenced in accordance with the notice of claim and time

limitation provisions of title eleven of article nine of the public

authorities law.

§ 62 — Article not affected if in part unconstitutional

Article not affected if in part unconstitutional. If any

section, subdivision, paragraph, sentence, clause or provision of this

article shall be unconstitutional or be ineffective in whole or in part,

to the extent that it is not unconstitutional or ineffective, it shall

be valid and effective and no other section, subdivision, paragraph,

sentence, clause or provision shall on account thereof be deemed invalid

or ineffective.

ARTICLE 3-A Permanent Housing For Homeless Families

§ 63 — Legislative findings and declaration

Legislative findings and declaration. The legislature hereby

finds and declares that many homeless families live in overcrowded and

often dilapidated welfare hotels in cities with a population of one

million or more; that welfare hotel placements are expensive and yet

offer only minimal shelter services; and that while the state and cities

with a population of one million or more must continue to develop cost

effective alternatives to welfare hotels, ultimately permanent housing

is the only real answer to the homeless problem. It is further found

that absent development of more permanent housing, lengths of stay in

temporary shelters will continue to increase forcing an even more rapid

escalation in the welfare hotel population and the concomitant growth in

total state emergency shelter spending.

The legislature further finds that the New York state infrastructure

trust fund provides a unique opportunity to increase permanent housing

for homeless families. The legislature therefore finds that the state

should dedicate New York state infrastructure trust fund moneys to the

creation of permanent housing for families in cities with a population

of one million or more who are homeless or at risk of being homeless and

primarily for families referred from hotels, motels or tier II shelters

for families; that such state funds shall be matched by an equal amount

of city funding and that the city of New York in the most recent

homeless families plan submitted to the council of the city of New York

by the human resources administration has proposed to provide

eighty-five million dollars for such funding; that permanent housing

projects shall be constructed or rehabilitated and sites selected in

accordance with a homeless families plan.

The legislature further finds that the key elements of such projects

shall be: identification by the city of proposed project sites; review

by an advisory board of the sites proposed by the city in order to

identify those buildings and properties that can be expeditiously

developed and produce the maximum number of units at the lowest cost per

unit; approval of recommended sites by the city; administration of

construction or rehabilitation activities by the New York state housing

finance agency; and selection of a developer or developers to design,

construct or rehabilitate permanent housing projects for homeless

families.

§ 64 — Definitions

Definitions. The following terms, whenever used or referred to

in this article, unless the context indicates otherwise, shall have the

following meanings:

1. "Agency" shall mean the New York state housing finance agency.

2. "City" shall mean cities with a population of one million or more.

3. "Eligible homeless families" shall mean in cities with a population

of one million or more families who are homeless or who live in

temporary or transitional housing and are unable to secure permanent and

stable housing without special assistance, or families who live in

permanent housing who are in danger of becoming homeless, or such other

categories of families at risk of being homeless as determined by the

commissioner of social services or a social services district.

4. "Permanent housing for homeless families site review advisory

board" or "board" shall mean the board referred to in section sixty-five

of this article.

5. "Permanent housing project for homeless families" or "project"

shall mean a specific work or improvement, including lands, buildings

and improvements acquired, owned, constructed, renovated, rehabilitated,

managed or operated pursuant to this article, and such incidental or

appurtenant facilities as may be approved by the agency.

6. "Eligible project costs" shall mean the reasonable and necessary

cost of any and all undertakings for planning, financing, land

acquisition, demolition, construction, rehabilitation, equipment and

site development, and such other expenses incurred in relation to the

project with respect to units to be occupied by eligible homeless

families as the agency may deem appropriate to effectuate the purposes

of this article.

7. "State" shall mean the state of New York.

§ 65 — Permanent housing for homeless families site review advisory board

Permanent housing for homeless families site review advisory

board. 1. There is hereby created the permanent housing for homeless

families site review advisory board. The board will consist of the state

commissioner of housing and community renewal, the state commissioner of

social services, the commissioner of the department of housing

preservation and development of the city, the commissioner/administrator

of the human resources administration of the city, and two

representatives of organizations involved in providing housing. The

governor of the state and the mayor of the city shall each appoint one

of the aforementioned representatives to the board. Any action taken by

the members shall require the affirmative vote of a majority of the

members. Any member who is not appointed by the governor or mayor may

select a designee from their respective departments or divisions. Any

such designees shall have the power to attend and to vote at any meeting

of the board from which the member is absent with the same force and

effect as if the member were present and voting. Such designation shall

be by written notice filed with the board. The designation of such

person shall continue until revoked at any time by written notice to the

board. Notwithstanding any inconsistent provisions of law, general,

special or local, no officer or employee of the state, or of any civil

division thereof, or any public benefit corporation, shall be deemed to

have forfeited or shall forfeit his or her office or employment by

reason of acceptance of membership on the board created by this section.

2. In carrying out its duties under this article the board may request

the assistance of appropriate city and state agencies, public benefit

corporations and public authorities. The aforesaid agencies, public

benefit corporations and public authorities are authorized to provide

such assistance within their respective functions as the board may

require.

3. Notwithstanding any other provision of law, the board shall be

authorized to let contracts in such manner as it deems appropriate and

to execute all instruments as necessary to carry out its

responsibilities. The board may contract with the agency to provide for

the reasonable and necessary expenses of the board.

4. Moneys in the permanent housing for homeless families fund may not

be used to pay for any administrative or other expenses of the agency or

board, provided however, that moneys in such fund may be used to pay for

eligible project costs.

§ 65-a — Permanent housing projects for homeless families

Permanent housing projects for homeless families. 1. Site

identification; initial project description. For each proposed permanent

housing project for homeless families, the city will identify a site or

sites for development of permanent housing for homeless families. If the

site or sites are proposed to the board for rehabilitation, any building

or buildings on the site must be vacant. Prior to any action by the

board, the city must submit to the board an initial project description

which sets forth, to the extent known, (a) a detailed physical

description of the property and the number of eligible homeless families

estimated to be served by the project; (b) the tenant population that

will be served by the project and how the project will address the needs

of these tenants; (c) a description of other funding sources that will

be used to develop the project, if any; (d) the category of permanent

housing proposed to be established; (e) a plan which provides that the

units for eligible homeless families provided under this article will to

the maximum extent practicable be occupied by eligible homeless families

referred from hotels, motels or shelters that are regulated by title

eighteen of the official compilation of codes, rules and regulations of

the state of New York; (f) where relevant, information stating whether

the city intends to convey the project to a not-for-profit corporation

or housing development fund company, and, unless stated otherwise, it

will be assumed that the city will hold title to the project once

completed; (g) a proposed development timetable; (h) the names,

addresses and business background of the principals involved, the nature

of their fiduciary relationship and their financial relationship, past,

present and future, to the project and to each other; (i) information

regarding the operation of such project and the affordability of such

project for eligible homeless families; and (j) such other information

as the board may require. The board will also require in the project

description that the costs associated with the construction or

rehabilitation of those portions of projects that are not designed for

occupancy by eligible homeless families are paid for by other funding

programs or sources, and that completed projects must meet all

applicable city or state codes governing such construction or

rehabilitation. With the approval of the city, a not-for-profit

corporation, housing development fund company or a person, firm or

corporation that will agree to limit its profits or rate of return of

investors in accordance with a formula established or approved by the

agency, may submit to the board one or more sites along with a project

description in the form prescribed above.

2. After receipt of the initial project description described above,

the board will review each proposed site and identify those sites that

the board finds suitable for construction or rehabilitation for

permanent housing for eligible homeless families. No site may be

considered by the board unless the project proposed for the site will

carry out the objectives of the homeless families plan most recently

submitted to the council of the city by the New York city human

resources administration. In its review, the board will give preference

to those projects that will result in the lowest costs per unit, can be

completed in the least amount of time, serve the greatest need for such

housing and also provide housing for occupants who are not eligible

homeless families.

3. After it has completed its review, the board shall advise the mayor

of the city of its recommendations concerning the suitability of

proposed sites for development as permanent housing for the homeless. No

project shall be undertaken by the agency pursuant to this article

unless the project site has been approved by the advisory board.

§ 65-b — Funds for permanent housing projects for homeless families

Funds for permanent housing projects for homeless families.

The agency is authorized to receive and administer funds provided by the

state and a city, as well as grants-in-aid and gifts of real and

personal property, including money, from any source whatsoever, to be

used to develop permanent housing accommodations for eligible homeless

families. In carrying out its duties under this article the agency may

require the assistance of appropriate city and state departments or

agencies, public benefit corporations and public authorities. The

aforesaid departments, agencies, public benefit corporations and public

authorities are authorized to provide such assistance within their

respective functions as the agency may require.

§ 65-c — Approval of funding agreement; issuance of requests for proposals

Approval of funding agreement; issuance of requests for

proposals. The city's funds for such projects shall be provided as

payments, grants or loans pursuant to a funding agreement or agreements

with the agency. Any such agreement shall include the amount of funding

to be provided by the city, the manner in which the city will make the

funds available to the agency or the agency's designee, and a

description of the projects and project sites, and shall be subject to

the approval of the mayor and the local legislative body of the city.

Notwithstanding any inconsistent provisions of law, general, special or

local, or charter, the mayor and the local legislative body shall take

action to approve or disapprove such agreement within sixty days of its

submission, provided, however, that if the mayor fails to approve or

disapprove the agreement during such period the mayor shall be deemed to

have approved the agreement and provided further that if the local

legislative body fails to approve or disapprove such agreement during

such period the local legislative body shall be deemed to have approved

the agreement. In the case of a project for which a not-for-profit

corporation, housing development fund company or limited profit entity

has provided sites with the city's approval, approval by the mayor and

the local legislative body shall not be required under this section

where such project has already received approval from the mayor and the

local legislative body. Upon approval by the mayor and the local

legislative body of such agreement, and upon satisfaction of such other

conditions as the agency may establish, including but not limited to,

satisfactory assurances from the city that projects on approved sites

will receive expedited reviews by city departments and agencies having

jurisdiction over the project, the agency is authorized to issue one or

more requests for proposals to developers who shall be not-for-profit

organizations or persons, partnerships, corporations or other entities

that will agree to limit their profits or rate of return of investors in

accordance with a formula established or approved by the agency with

respect to the project, for the development, design, construction, or

rehabilitation of permanent housing projects for eligible homeless

families. Approval of an agreement by the mayor and the local

legislative body pursuant to this section shall not itself require

compliance with any local land use review procedure, nor shall it

constitute an action for purposes of article eight of the environmental

conservation law, provided, however, that this section shall not grant

any exemption from such procedures or laws if otherwise applicable.

Notwithstanding the provisions of article one-A of the public

authorities law, contracts entered into by the agency pursuant to this

article shall not be subject to the provisions of article one-A of the

public authorities law.

§ 65-d — Selection of developers

Selection of developers. Following receipt by the agency of

proposals in response to such request, the agency shall evaluate the

proposals in consultation with appropriate city departments and agencies

and recommend to the mayor of the city for his approval developers who

are suitable and qualified to develop, design, construct or rehabilitate

one or more permanent housing projects for eligible homeless families.

The agency is authorized to contract with any developer who is approved

by the mayor for the development, design, construction or rehabilitation

of such projects.

§ 66 — Authorized courses of action

Authorized courses of action. For each project, the agency will

review and approve or disapprove a final project description containing

the information specified in section sixty-five-a of this article. The

final project description shall include the identity of the project

owner. After consultation with the city and review of responses to

requests for proposals and within the limit of funds available in the

permanent housing for homeless families fund, the agency shall award

such contracts as it deems appropriate to developers in order to provide

one or more projects for which it has approved a final project

description. In proceeding with a project, the agency is authorized to

take such courses of action, including, but not limited to, the

following, as may be necessary or useful in enabling the agency to

accomplish its purposes:

1. The developer may hold title to the project during development,

construction and rehabilitation;

2. In order to facilitate project development, the agency may enter

into a license agreement with the holder of the title to the project;

3. Upon completion of construction or rehabilitation of the project by

a developer who has taken title to the project, title shall be conveyed

in accordance with the approved final project description, or, in the

absence of a not-for-profit corporation or housing development fund

company designated by the city to receive title to the project, title

shall be conveyed to the city.

§ 67 — Liability on obligations

Liability on obligations. 1. Except for obligations which the

agency assumes by contract for the construction, rehabilitation and

development period of any project, neither the agency nor the state

shall have any responsibility or liability as to the construction,

rehabilitation, operation, maintenance, repair or use of projects unless

otherwise specifically provided by statute.

2. Any contract entered into pursuant to this article between the

agency and the developer or owner of a project shall cite and set forth

subdivision one of this section.

§ 68 — State/city allocations of permanent housing projects for homeless families

State/city allocations of permanent housing projects for

homeless families. 1. No contract shall be entered into by the agency or

its designee in connection with the administration of projects,

including the payment of project costs, unless the agency is assured to

its satisfaction that the city has provided or will provide fifty

percent of such costs to the agency or its designee. Moneys received

from sources other than the city or the state may, at the agency's

discretion, be expended without regard to such limitation.

Notwithstanding any other provision of law, payments, grants and loans

may be deposited by the agency directly with a lending institution at or

before the time of initial loan closing pursuant to an escrow agreement

satisfactory to the agency.

2. Moneys expended by the agency for the purposes of this article

shall not substitute for locally funded operating or capital

expenditures which the city would have allocated through its normal

budgetary process to programs that provide permanent housing for

homeless families in the absence of the funds provided for this program.

All such moneys shall be used to increase locally funded operating or

capital expenditures for permanent housing for homeless families to a

level which is greater than the level which would have existed if such

moneys had not been provided by the state. Nothing in this subdivision

shall require the city to allocate funds for housing programs if in the

city's judgment such allocation would require an increase in taxation or

a reduction in other city services.

§ 69 — Compliance; general and administrative provisions

Compliance; general and administrative provisions. 1. The owner

of each project shall be responsible for assuring compliance with the

terms and conditions of the approved project description and this

article. Any project owned by a not-for-profit corporation or a housing

development fund company shall be subject to such terms and conditions

for a period of thirty-five years or such longer period as may be

provided in the project description. No project may be transferred

except in accordance with the project description, and the project

description may not be changed without the approval of the agency.

2. The agency shall issue and promulgate guidelines for the

administration of this article. The guidelines shall include provisions

concerning approval of project descriptions, the eligibility of

developers for contracts under this article; funding criteria and the

funding determination process; supervision and evaluation of contracting

developers; reporting, budgeting and record-keeping requirements;

provisions for modification and termination of contracts and recapture

of funds; and such other matters not inconsistent with the purposes and

provisions of this article as the agency shall deem necessary or

appropriate.

ARTICLE 4 Limited Dividend Housing Companies

§ 70 — General policy

General policy. It is hereby declared to be the policy of this

article to encourage the investment of the savings of the people in low

rent housing accommodations, to protect such investment against loss and

to assure a fair return thereon. To this end, every responsible official

of the state shall, wherever necessary, take all reasonable steps to the

end that the security and safety of the mortgages referred to in this

article shall be safeguarded and to maintain public confidence in the

stock and obligations of housing companies created under this article.

§ 71 — Definitions

Definitions. The following terms, whenever used or referred to

in this act, shall be construed as follows:

1. The term "housing company" means a limited-dividend housing

corporation, a partnership (general or limited) or a trust organized

pursuant to this article.

2. The term "project" means a specific work or improvement undertaken

by a housing company, which shall include lands, buildings and

improvements acquired or constructed to provide dwelling accommodations

within the rental limitations prescribed by this article, and such

stores, offices, social, recreational, communal or other non-housing

facilities as may be deemed by the commissioner to be incidental or

appurtenant to a project.

3. The term "mutual" when applied to a housing company shall mean a

housing company which is a corporation operated exclusively for the

benefit of the persons or families who are entitled to occupancy in a

project of such housing company by reason of ownership of shares in such

housing company.

4. The term "local and municipal taxes" means taxes levied by a

county, city, village, town, school and special district but shall not

include assessments for local improvements.

5. The term "state urban development corporation project" means a

project of a limited-dividend housing company which is a subsidiary of

the New York state urban development corporation, as the term

"subsidiary" is defined in the New York state urban development

corporation act.

6. The term "capital" means, in the case of a corporation, its capital

shares issued and outstanding; in the case of a partnership, the

aggregate value of the money and property contributed by the partners

for the purpose of carrying on the business of the partnership, so far

as such is credited to the partners on capital account; and in the case

of a trust, the aggregate value of the money or property subject to the

trust.

§ 72 — Housing companies; how created

Housing companies; how created. 1. Three or more persons may

become a housing company which is a corporation, for the purpose of

carrying out a project or projects, on making, signing, acknowledging

and filing a certificate which shall contain:

(1) The name of the proposed housing company.

(2) The purposes for which it is to be formed which shall be as

follows: To acquire, construct, maintain and operate projects.

(3) The amount of the capital shares, and if any be preferred shares,

the preference thereof.

(4) The number of shares of which the capital shall consist, all of

which shall have a par value.

(5) The city, village or town and county or borough in which its

principal business office is to be located and the address to which the

secretary of state shall mail a copy of process in any action or

proceeding against the housing company which may be served upon him.

(6) Its duration, which shall not be less than twenty years.

(7) The number of directors, which shall not be less than three.

(8) The names and post-office addresses of the directors for the first

year.

(9) The names and post-office addresses of the subscribers to the

certificate and a statement of the number of shares which each agrees to

take in the housing company.

(10) A provision that the real property of the housing company shall

not be sold, transferred or assigned except under and pursuant to the

terms and provisions of this article.

(11) A declaration that all of the subscribers to the certificate are

of full age; that at least two-thirds of them are citizens of the United

States and that at least one of them is a resident of the state of New

York; that at least one of the persons named as a director is a citizen

of the United States and a resident of the state of New York.

(12) That the secretary of state is designated as the agent of the

housing company upon whom process in any action or proceeding against it

may be served.

2. (1) A housing company may be created as a general partnership by

the partners signing, acknowledging and filing as hereinafter provided a

certificate which shall contain:

(a) The matters set out in paragraphs one, two, five, six, and ten of

subdivision one of this section.

(b) The names and post-office addresses of the partners.

(c) A statement of the capital of the partnership.

(d) A declaration that all the partners are of full age, that at least

two-thirds of them are citizens of the United States, and that at least

one of them is a resident of the state of New York.

(2) A housing company may be created as a limited partnership by the

partners filing as provided herein a copy of the certificate filed with

the county clerk pursuant to article eight of the partnership law. The

partners shall at the same time sign, acknowledge and file a further

certificate which shall contain the matters set out in paragraphs one,

two, five, six and ten of subdivision one of this section and a

declaration that all the general partners are of full age, and at least

two-thirds of them are citizens of the United States, and at least one

of them is a resident of the state of New York.

3. A housing company may be created as a trust by the settlor signing,

acknowledging and filing as hereinafter provided a certificate which

shall contain:

(1) The matters set out in paragraphs one, two, five, six, and ten of

subdivision one of this section.

(2) A statement of the capital of the trust.

(3) The name and post-office address of the trustee or trustees.

(4) The name and post-office address of any person having a beneficial

interest, whether vested or contingent, under the trust.

(5) A declaration that all the trustees are of full age; that at least

two-thirds of them are citizens of the United States, and that at least

one of them is a resident of the state of New York.

4. A certificate made pursuant to this section shall further contain a

declaration that the housing company has been organized to serve a

public purpose and that it shall remain at all times subject to the

supervision and control of the commissioner or of other appropriate

state authority; that all real estate acquired by it and all structures

erected by it, shall be deemed to be acquired for the purpose of

promoting the public health and safety and subject to the provisions of

this article, and that the shareholders, partners or in the case of a

trust, the settlor, trustees or beneficiaries as their interest may

appear, shall be deemed to have agreed that they shall at no time

receive or accept from the housing company, in repayment of their

investment or interest in its capital, any sums in excess of the par

value of the shares, or of the amount of their contribution to, or

beneficial interest in capital, together with cumulative distributions

upon capital at the rate of six per centum per annum, and that any

surplus in excess of such amount if said company shall be dissolved, or

terminated, in the case of a housing company which is a trust, shall be

paid into the general fund of the state of New York if the buildings and

improvements of the project have not received exemption from taxation by

the municipality pursuant to subdivision three or four of section

ninety-three, or if the company has not received a loan from the

municipality, but if such tax exemption or loan has been received, any

remaining surplus shall be paid into the general fund of the

municipality.

5. A certificate made pursuant to the provisions of this section may

provide that in the event that income debenture certificates are issued

by the housing company, the owners thereof may be given the same right

to vote as they would have if possessed of shares of equivalent par

value in the case of a corporation or if they had contributed capital in

the case of a partnership or had a beneficial interest under the trust

vested in the case of a trust, of the amount of the income debenture

certificates held by them.

If provision is made for the issuance of income debenture

certificates, interest shall be paid by the housing company on income

debenture certificates only out of net earnings of the housing company

that would be applicable to payment of distributions if there were no

income debentures.

6. The certificate may permit the retirement of income debenture

certificates and capital of the housing company if, as and when there

shall be funds available in the treasury of the housing company from the

receipt of amortization or sinking fund installments for that purpose as

provided for by this article, but the amount so retired shall not exceed

ninety per centum of the par value of shares or amount of the capital

and the face value of income debentures issued and outstanding at the

time of the final completion of the building or buildings embraced in

the project.

§ 73 — Consent of commissioner to creation of housing companies

Consent of commissioner to creation of housing companies. 1. If

any certificate made pursuant to subdivision one of section seventy-two

shall be presented to the secretary of state he shall not file said

certificate unless there shall accompany the same a certificate of the

commissioner that he consents to the filing of such certificate. In the

case of a housing company which is a partnership or trust, the

certificate shall be filed with the commissioner.

2. The commissioner shall not accept for filing a certificate of a

housing company which is a partnership (general or limited) or a trust

unless there has first been filed with him a partnership agreement or

trust agreement as the case may be, the terms and conditions of which

shall be subject to his approval.

§ 74 — Application of other laws

Application of other laws. The provisions of the business

corporation law as hereafter from time to time amended shall apply to

housing companies which are corporations, and the provisions of all

applicable law shall apply to housing companies which are partnerships

or trusts, except where any such provisions are in conflict with this

article.

§ 75 — Designation of and service of process on secretary of state and registered agent

Designation of and service of process on secretary of state and

registered agent. The provisions of sections three hundred four, three

hundred five and three hundred six of the business corporation law shall

apply to housing companies heretofore or hereafter organized as

corporations under this article.

§ 76 — Limited return on capital and debentures

Limited return on capital and debentures. No shareholder,

partner or beneficiary of a trust having an interest vested in

possession in any housing company formed hereunder shall receive any

distribution on capital in any one year in excess of six per centum per

annum except that when in any preceding year distributions in the amount

prescribed in the certificate shall not have been paid on the said

capital, the shareholders, partners or beneficiaries, as the case may

be, may be paid such deficiency without interest out of any surplus

earned in any succeeding years. This provision shall likewise be

applicable to income debenture certificates and interest thereon at the

rate specified in such certificates shall be cumulative.

§ 77 — Time of payment of subscription or capital contributions

Time of payment of subscription or capital contributions. 1.

Subscriptions to the shares or income debentures of a housing company

organized as a corporation shall be paid at such times and in such

installments as the board of directors and the commissioner may require.

If any default shall be made in the payment of any installment as so

required, the board of directors may enforce said subscription by

appropriate action and upon their failure so to do said subscription may

be enforced by the commissioner. At the option of the board of directors

with the consent of the commissioner, the board of directors may upon

such default declare the shares or income debentures and all previous

payments thereon forfeited, after the expiration of twenty days from the

service on the defaulting shareholder personally, or by mail directed to

him at his address as shown on the books of the housing company, of a

written notice requiring him to make payment within twenty days from the

service of the notice at a place specified therein and stating that, in

case of failure to do so, his shares or income debentures and all

previous payments thereon will be forfeited. Such shares or income

debentures if forfeited may be reissued or reoffered for subscription.

If a receiver of the housing company has been appointed, all unpaid

subscriptions shall be paid at such times and in such installments as

such receiver or the court may direct.

2. Capital contributions to a housing company organized as a

partnership (general or limited) or a trust shall be paid at such times

and in such installments as shall be provided by the partnership

agreement or trust agreement. Such partnership agreement or trust

agreement shall contain provisions for enforcement of the terms and

conditions thereof by the partners or trustees, or upon their failure to

do so, by the commissioner, if any payment so required shall not be

made. If a receiver of the housing company has been appointed, all

unpaid capital contributions shall be paid at such times and in such

installments as such receiver or the court may direct.

§ 78 — Consideration for capital and bonds

Consideration for capital and bonds. No housing company which is

a corporation shall issue shares, nor shall a housing company which is a

partnership credit sums to the partners on capital account, nor shall a

housing company which is a trust subject amounts to the trust, and no

housing company shall issue bonds or income debentures, except for money

or property actually received for the use and lawful purposes of the

housing company, provided, however, that a mutual housing company may

issue shares for home owners purchase notes if the purchase transaction

has received the written endorsement of the commissioner in accordance

with supplementary rules and regulations of the commissioner made

therefor and if at least two hundred dollars in money or property is

received by such mutual housing company toward the issuance of such

shares. The consideration for all capital, bonds or income debentures

based upon property received shall equal a valuation approved by the

commissioner and such valuation shall be used in computing actual or

estimated cost.

In no event shall the capital of, and income debentures issued by, the

housing company be less than the total of twenty per centum of the

actual cost, as defined in this article, of any project or projects

undertaken pursuant to this article.

The commissioner may permit capital to be increased, or income

debentures to be issued, to an amount not exceeding three per centum of

the estimated total cost, or three per centum of the actual cost, if

actual cost should exceed estimated cost, of a project for working

capital to be used in connection with such project.

§ 79 — Minimum amount of capital and debentures

Minimum amount of capital and debentures. The entire amount of

capital, together with any income debentures of a housing company shall

be equivalent to at least twenty per centum of the actual cost of the

project or projects which it operates except that in the case of a

housing company which receives a loan from the New York state urban

development corporation, created by the New York state urban development

corporation act, such amount shall be equivalent to at least five per

centum of such actual cost. The provisions of this section shall not be

applicable to any housing company if such company shall receive a loan

from a municipality pursuant to section ninety-three of the public

housing law, or if funds made available by the federal government or any

instrumentality thereof, or any mortgage or mortgage bonds insured by

the federal housing administrator or any other instrumentality of the

federal government are used in financing the project in whole or in

part.

§ 80 — Income debentures

Income debentures. With the approval of the commissioner the

certificate, or an amended certificate, may authorize the issuance of

income debenture certificates bearing no greater interest than six per

centum per annum. In the case of a housing company organized as a

corporation the directors thereof may, with the consent of two-thirds of

the holders of the preferred shares issued and outstanding, offer to the

shareholders of the housing company, the privilege of exchanging their

shares in such quantities and at such times as may be approved by the

commissioner for such income debenture certificates. In no event shall

the amount of shares of the housing company be less than ten per centum

of the total of shares and income debentures.

§ 81 — Mortgages and mortgage bonds

Mortgages and mortgage bonds. 1. (a) Any housing company formed

under this article may, subject to the approval of the commissioner,

borrow funds and secure the repayment thereof by bond or note and

mortgage or by an issue of bonds under trust indenture. Each mortgage or

issue of bonds by a housing company formed hereunder shall relate only

to a single specified project and no other and said bonds shall be

secured by mortgage upon all of the real property of which said project

consists.

(b) First lien bonds or notes of such housing company when secured by

a mortgage not exceeding four-fifths of the estimated cost prior to the

completion of the project, or four-fifths of the appraised value or

actual cost, whichever shall be less, after such completion, as

certified by the commissioner, are hereby declared securities in which

all public officers and bodies of the state and of the municipal

subdivisions, all insurance companies and associations, and all savings

banks and savings institutions, including savings and loan associations,

in the state may properly and legally invest the funds within their

control.

2. The bonds and notes so issued and secured and the mortgage or trust

indentures relating thereto, may create a first or senior lien and a

second or junior lien upon the real property embraced in any project;

provided, however, that the total mortgage liens shall not exceed eighty

per centum of the estimated cost prior to the completion of the project,

or eighty per centum of the appraised value or actual cost, whichever

shall be less, as certified by the commissioner after such completion.

Where there is a first and a second mortgage lien upon the property

embraced in a project, only the first or senior lien thereon shall be

deemed a security in which such officers, bodies, corporations and

associations may invest the funds within their control. Such bonds and

mortgages, notes and mortgages or trust indentures may contain such

other clauses and provisions as shall be approved by the commissioner,

including the right to assignment of rents and entry into possession in

case of default and including in the case of a housing company which is

a partnership or trust the right of the partners or trustees, as the

case may be, to be free of any personal liability thereunder; but the

operation of the housing project in the event of such entry by mortgagee

or receiver shall be subject to the regulations of the commissioner

under this article. Provisions for the amortization of the bonded

indebtedness or notes of indebtedness of companies formed under this

article shall be subject to the approval of the commissioner.

3. (a) So long as funds made available by the federal government or

any instrumentality thereof or any mortgage, mortgage bonds or notes

guaranteed or insured by the federal government or any instrumentality

thereof, or any mortgage or mortgage bonds or notes secured by

obligations so guaranteed or insured, or tax exempt obligations issued

pursuant to section eleven of the United States housing act of nineteen

hundred thirty-seven, are used in financing, in whole or in part, any

project under this article, the capital structure of a housing company

undertaking such project and the proportionate amount of the cost of the

lands and improvements to be represented by mortgages, bonds or notes

shall be entirely in the discretion of the commissioner; and all

restrictions as to the amounts to be represented by mortgages, mortgage

bonds, mortgage notes, income debentures or shares shall be inapplicable

to such projects or to housing companies undertaking such projects,

except that the bonds, notes, mortgages, debentures and shares covering

any project shall not exceed the actual final cost of such project, as

defined in this article.

(b) Notwithstanding anything contained in paragraph (b) of subdivision

one of this section, first lien bonds or other obligations of housing

companies, secured by a first mortgage upon all of the real property of

a project and not exceeding the estimated cost prior to the completion

of the project, or the appraised value or actual cost, whichever shall

be less, after such completion, as certified by the commissioner, are

hereby declared securities in which all public officers and bodies of

the state and of the municipal subdivisions, all insurance companies and

associations, and all savings banks and savings institutions, including

savings and loan associations, in the state may properly and legally

invest the funds within their control, provided that

(1) the federal housing commissioner has insured, or has made a

commitment to insure, such mortgage; or

(2) such bonds or other obligations are guaranteed or insured to at

least forty per centum of the principal amount thereof under title three

of an act of congress of the United States entitled the "Servicemen's

Readjustment Act of 1944," or are secured by obligations so guaranteed

or insured; or

(3) such bonds or other obligations evidence a loan for the purpose of

financing construction and are to be guaranteed or insured under said

title three, as hereinabove provided, upon completion of such

construction, and all funds advanced on such loan are guaranteed or

insured under said title three to the extent of at least thirty per

centum of such advance, or are secured by obligations so guaranteed or

insured.

* 4. So long as funds made available by the New York state urban

development corporation, pursuant to the New York state urban

development corporation act, are used in financing, in whole or in part,

any project under this article, all restrictions as to the amounts to be

represented by mortgages, mortgage bonds, mortgage notes, income

debentures or capital shall be inapplicable to such projects or to

housing companies undertaking such projects, provided however that any

mortgage loan from the New York state urban development corporation to

housing companies undertaking such projects shall not exceed ninety-five

per centum of project cost, as certified by the commissioner.

* NB (Effective until ruling by Internal Revenue Service)

* 4. So long as funds made available by the New York state urban

development corporation or the New York state housing finance agency,

pursuant to the New York state urban development corporation act or the

New York state housing finance agency act, as the case may be, are used

in financing, in whole or in part, any project under this article, all

restrictions as to the amounts to be represented by mortgages, mortgage

bonds, mortgage notes, income debentures or capital shall be

inapplicable to such projects or to housing companies undertaking such

projects, provided however that any mortgage loan from the New York

state urban development corporation or the New York state housing

finance agency, as the case may be, to housing companies undertaking

such projects shall not exceed ninety-five per centum of project cost,

as certified by the commissioner.

* NB (Effective pending ruling by Internal Revenue Service)

5. The capital structure of a housing company acquiring a project from

a company organized pursuant to article eleven of this chapter may be

fixed by the commissioner, notwithstanding any limitations in this

article as to the amount to be represented by mortgages, debentures or

capital.

§ 82 — Limitations

Limitations. No housing company shall:

1. Acquire any real property or interest therein unless it shall first

have obtained approval of the project from the commissioner, and a

certificate that such acquisition is necessary or convenient for the

public purpose defined in this article, and unless any deed, lease or

other instrument by which such real property or interest therein is

acquired contains a statement that the conveyance is to a housing

company organized pursuant to article four of the private housing

finance law.

2. Sell, exchange, transfer or assign any real property except (a) to

a municipality wherein a project is to be located, for public purposes

only and upon such terms and conditions, with or without compensation,

as the commissioner may approve, or with the written consent of the

commissioner to another housing company formed under this chapter, and

(b) for a price not in excess of the cost of the said property less any

amounts paid in amortization of the mortgage indebtedness and the

retirement of capital, plus so much of the distribution on capital of

the said housing company as shall have been unpaid, and accrued interest

on the mortgage indebtedness and income debenture certificates. Real

property surplus to the needs of the housing company may be sold,

exchanged, transferred or assigned to any person, partnership, trust,

firm or corporation upon such terms and conditions as the commissioner

may approve.

3. Encumber or lease all or any part of its real property to any other

person, partnership, trust, firm, or public or private corporation,

without the written consent of the commissioner, provided, however, that

leases conforming to the regulations and rules of the commissioner and

for actual occupancy by the lessees may be made without the consent of

the commissioner. Any conveyance, encumbrance, lease or sub-lease made

in violation of the provisions of this section and any transfer or

assignment thereof shall be void.

4. Pay interest returns on its mortgage indebtedness at a higher rate

than six per centum per annum, or at the rates of interest of mortgages

or mortgage bonds insured by the federal housing administration or any

other instrumentality of the federal government applicable at the time

the housing company incurs the mortgage indebtedness, or at such higher

rates as may be approved by the commissioner, or pay interest upon its

income debenture certificates at a rate higher than six per centum per

annum.

5. Issue its shares, in the case of a housing company which is a

corporation, credit sums to partners on capital account, in the case of

a housing company which is a partnership, subject amounts to the trust,

in the case of a housing company which is a trust, and no housing

company shall issue debentures and bonds covering any project undertaken

by it in an amount greater in the aggregate than the total actual final

cost of such project, including the lands, improvements, charges for

financing and supervision approved by the commissioner and interest and

other carrying charges during construction, and an allowance for working

capital to be approved by the commissioner but not exceeding three per

centum of the estimated cost or of the total actual final cost of the

project if that shall be greater than the estimated cost.

6. Mortgage any real property without first having obtained the

consent of the commissioner.

7. Issue any securities or evidences of indebtedness without first

having obtained the approval of the commissioner.

8. Use any building erected or acquired by it for other than housing

purposes, except that when permitted by law the story of the building

above the cellar or basement and the space below such story may be used

for stores, co-operative or community purposes, and when permitted by

law the roof may be used for co-operative or community purposes.

9. Charge or accept any rental for housing accommodations in any

project constructed, acquired, operated or managed by it in excess of

the prices approved by the commissioner.

10. Enter into contracts for the payment of salaries to officers,

employees, directors, partners, trustees or beneficiaries except subject

to the approval of the commissioner and under such regulations as the

commissioner may from time to time prescribe.

11. Enter into contracts for the construction or for the substantial

repair, improvement or operation of projects except subject to the

approval of the commissioner and under such regulations as the

commissioner may from time to time prescribe.

12. Voluntarily dissolve, or in the case of a trust, terminate,

without first having obtained the consent of the commissioner.

13. Make any guaranty without the approval of the commissioner.

14. Without the prior approval of the commissioner as to the terms and

conditions thereof, sell, lease, or otherwise convey all or any part of

a project to an authority.

The commissioner may declare that any of the limitations set forth in

this section shall be inapplicable, in whole or in part, to mutual

housing companies after the period of municipal tax exemption granted to

such mutual housing company projects pursuant to this article has

expired.

§ 82-a — Redevelopment loans

Redevelopment loans. Notwithstanding any provision of section

eighty-one or eighty-two of this article to the contrary, where a

housing company undergoes a comprehensive redevelopment plan, the

commissioner may approve a loan and encumbrance of such project in an

amount in excess of actual cost of the project, provided that such

amount represents cost of capital improvements, redevelopment or

acquisition by a new owner, any consequent rent increase is not unduly

burdensome to the tenants, and the housing company enters into an

agreement to remain subject to the provisions of this article for a

period of no less than fifteen years from issuance of the loan and

encumbrance.

§ 83 — Execution of housing company projects

Execution of housing company projects. No building or

construction shall be undertaken by any housing company without the

approval of the commissioner. Such approval shall be conditioned upon:

1. The submission of a plan in such form and with such assurances as

the commissioner may prescribe, to raise at least twenty per centum of

the actual cost of the lands and improvements through investment in the

capital of such housing company together with the sale of income

debentures, where provided for by such plan; and to raise the balance by

mortgage bonds which shall not exceed eighty per centum of the actual

cost of the said project. The plan may provide for the raising of

working capital in an amount to be approved by the commissioner not to

exceed three per centum of the actual cost through investment in the

capital and sale of income debentures of the housing company. Wherever

reference is made in this article to cost of projects, or of buildings

and improvements in projects, such cost shall include charges for

financing and supervision approved by the commissioner, including a

reasonable proportion to be fixed by the commissioner, of the expenses

of the commissioner, applicable to the examination and supervision of

the project, and carrying charges during construction required in the

project, including interest on borrowed, and where approved by the

commissioner, on invested capital. Notwithstanding the provisions of any

other general, special or local laws, all moneys payable by the project

to reimburse the commissioner for his expenses applicable to the

examination and supervision of the project during construction as herein

provided shall be paid to the executive department.

2. The acceptance of a designee of the commissioner as a member of the

board of directors of said housing company. In the case of all mutual

companies an additional director shall be designated by the commissioner

at the creation of the company and shall serve from the time of such

designation at least until a board of directors has been elected by the

tenants entitled to occupancy in the project by reason of ownership of

shares in such company. Such directors appointed by the commissioner

need not be stockholders or meet other qualifications which may be

prescribed by the certificate of incorporation or the by-laws. In the

absence of fraud or bad faith the director appointed by the commissioner

shall not be personally liable for the debts, obligations or liabilities

of the corporation.

3. The approval by the commissioner of the plans, specifications and

estimated costs of the proposed housing facilities in respect to the

conformity thereof to reasonable standards of health, sanitation, safety

and provision for light and air.

4. When required by the commissioner, and except in the case of a

housing company which is a subsidiary of the New York state urban

development corporation, created by the New York state urban development

corporation act, the designation by the commissioner with respect to

each project approved by him of a trustee, which shall be a banking

corporation authorized to perform trust functions, and such trustee

shall receive moneys received by the housing company as its capital, or

as proceeds of its mortgage bonds, notes or income debentures and make

payment therefrom for the acquisition of land, the construction of

improvements and other items entering into cost of land and improvements

upon presentation of draft, check or order signed by a proper officer or

designee of the housing company and countersigned by the said

commissioner or a person designated by him for said purpose. Any funds

remaining in the custody of said trustee after the completion of the

said project and payment or arrangement in a manner satisfactory to the

commissioner for payment in full therefor shall be paid to the housing

company.

5. No such project shall be approved in contravention of any planning,

zoning, sanitary and building laws, ordinances and regulations

applicable to the municipality in which the project is situated.

6. Notwithstanding the provisions of subdivision five hereof, no state

urban development corporation project shall be approved unless it

complies with the requirements of local laws, ordinances, codes,

charters or regulations applicable to the construction, reconstruction,

rehabilitation, alteration or improvement of such project, except where

the state urban development corporation, in its discretion, finds such

compliance not feasible or practicable, in which event no such project

shall be approved unless it complies with the requirements of the state

building construction code, formulated by the state building code

council pursuant to article eighteen of the executive law, applicable to

such construction, reconstruction, rehabilitation, alteration or

improvement. No county, city, town or village shall have power to modify

or change the drawings, plans or specifications for the construction,

reconstruction, rehabilitation, or improvement of any such project or

the construction, plumbing, heating, lighting or other mechanical branch

of work necessary to complete the work in question, nor to require that

any person, firm or corporation employed on any such work shall perform

any such work in any other or different manner than that provided by

such plans and specifications, nor to require that any such person, firm

or corporation obtain any other or additional authority, approval,

permit or certificate, from such county, city, town or village as a

condition of doing such work, nor shall any condition whatever be

imposed by any such county, city, town or village in relation to the

work being done, and the doing of any such work by any person, firm or

corporation in accordance with the terms of such drawings, plans,

specifications or contracts shall not subject said person, firm or

corporation to any liability or penalty, civil or criminal, other than

as may be stated in such contracts or incidental to the proper

enforcement thereof; nor shall any county, city, town or village have

power to require that any subsidiary of the New York state urban

development corporation, or any lessee therefrom or successor in

interest thereto, obtain any other or additional authority, approval,

permit, certificate or certificate of occupancy from such county, city,

town or village as a condition of owning, using, maintaining, operating

or occupying any project acquired, constructed, reconstructed,

rehabilitated or improved by any such subsidiary of the New York state

urban development corporation.

§ 84 — Regulation of housing companies

Regulation of housing companies. The commissioner may:

1. Order such repairs as will preserve the health and safety of the

occupants of such buildings and structures owned or operated by housing

companies, and the maintenance thereof in proper condition and repair.

2. Order all housing companies to do such acts as may be necessary to

comply with the provisions of the law, the rules and regulations adopted

by the commissioner, or the terms of any project approved by the

commissioner, or to refrain from doing any acts in violation thereof.

3. Examine all housing companies and keep informed as to their general

condition, their capitalization and the manner in which their property

is constructed, leased, operated or managed with respect to their

compliance with all provisions of law and orders of the commissioner.

4. Either himself or through his inspectors or employees duly

authorized by him, enter in or upon and inspect the property, equipment,

buildings, plants, offices, apparatus and devices of any housing

companies; examine all books, contracts, records, documents and papers

of any housing companies and by subpoena duces tecum compel the

production thereof.

5. In his discretion, prescribe uniform methods and forms of keeping

accounts, records and books to be observed by housing companies, and

after a hearing to prescribe by order accounts in which particular

outlays and receipts shall be entered, charged or credited.

6. Require every housing company to file with the commissioner an

annual report setting forth such information as the commissioner may

require, verified by the oath of the president, vice-president,

treasurer, secretary, general manager or receiver, if any, thereof, or

by the person required to file the same. Such report shall be in the

form, cover the period and be filed at the time prescribed by the

commissioner. The commissioner may further require specific answers to

questions upon which the commissioner may desire information and may

also require such housing company to file periodic reports in the form,

covering the period, and at the time prescribed by the commissioner.

7. (a) Administer oaths, take affidavits, hear testimony and take

proof under oath at public or private hearings; (b) subpoena and require

the attendance of witnesses and the production of books and papers

pertaining to any investigation and inquiries authorized by this article

and examine them in relation to any matter concerning which the power to

investigate is granted; (c) issue commissions for the examination of

witnesses who are out of the state or unable to attend before him or are

excused from attendance; (d) investigate into the affairs of a housing

company and into the dealings, transactions or relationships of such

company with third persons; (e) intervene, as a matter of right, in any

action or proceeding of which notice shall be given, affecting the

project of a housing company; (f) take such steps in such action or

proceeding as may be necessary to protect the public interest.

With regard to duties or liabilities arising out of this article, the

state or the commissioner may be sued in the same manner as a private

person. No costs shall be awarded against the commissioner or the state

in any such litigation.

8. Waive, in whole or in part, any of the regulatory powers over

mutual housing companies vested in him by this article after the period

of municipal tax exemption granted to such mutual housing company

projects pursuant to this article has expired.

8-a. Notwithstanding any other provision of law, with respect to

projects completed prior to July first, nineteen hundred eighty-five, no

limited dividend housing company shall be required to pay the

commissioner any fees for the audit or other regulation of the company.

9. From time to time make, amend and repeal rules and regulations for

carrying into effect the provisions of this article.

10. Modify supervision of a housing company upon finding that

duplicative supervisory functions may impose an undue regulatory burden

or unnecessary expenditure of agency resources, by taking such actions

as are deemed appropriate, including consolidating supervisory functions

associated with different programs, and entering into memoranda of

understanding with other agencies for the allocation of supervisory

functions.

§ 84-a — Additional supervision and regulation of housing companies

Additional supervision and regulation of housing companies.

The commissioner shall require that every company file with him, within

six months of the effective date of regulations implementing this

section and in such format as the commissioner shall prescribe an energy

audit report which identifies potential energy-saving building

improvements, including alterations, modifications and adjustments to

the building structure, heating, cooling, lighting and ventilation

systems; their relative costs; potential energy and cost savings; and

simple payback periods, which for the purpose of this section shall mean

that period of time within which the estimated cost of such

improvements, exclusive of the cost of capital, would be recovered from

the savings generated by reduced energy consumption resulting from the

improvements. The energy audit shall be conducted by a public utility,

an engineer or architect licensed by the state, or the managing agent or

other representative of the company. A copy of the energy audit report,

required herein, shall be given to any duly constituted tenant's

association or cooperator's advisory council and a copy shall be

available for inspection and copying by any individual tenant who

requests it. The commissioner shall also require that every company

certify by March thirty-first, nineteen hundred eighty-four that all

compatible conservation measures identified in the energy audit report

which have simple payback period of one year or less have been

implemented; provided, however, if the commissioner determines within

sixty days of the date the energy audit report is filed that one or more

of such identified conservation measures cannot be implemented by March

thirty-first, nineteen hundred eighty-four, given the projected rent

revenues and any other monies available to the company from reserve

funds, loans or grants from the state or federal government or any other

source, the implementation of such conservation measures shall be

provided for according to a schedule prescribed by the commissioner.

§ 85 — Control of rentals

Control of rentals. 1. The commissioner shall fix the maximum

rental per room to be charged the tenants of the dwellings furnished by

a housing company, the average of such rentals for the dwellings in any

project not to exceed the maximum average rental prescribed by law,

except as provided in section eighty-seven. Such maximum average rental

rate shall be determined upon the basis of the actual final cost of the

project containing such rooms so as to secure, together with all other

income of the housing company, a sufficient income to meet all necessary

payments to be made by said housing company, as hereinafter prescribed,

and such room rental rates shall be subject to revision by the

commissioner from time to time. The payments to be made by a housing

company shall be

(a) All fixed charges, and all operating and maintenance charges and

expenses which shall include a charge to be fixed by the commissioner to

reimburse him in whole or in part for the expenses of inspection,

supervision and auditing, taxes, assessments, insurance, amortization

charges in amounts approved by the commissioner to amortize the mortgage

indebtedness in whole or in part, improvements and additions to the

projects to the extent and in the amount approved by the commissioner;

depreciation charges if, when and to the extent deemed necessary by the

commissioner; reserves, sinking funds and expenses essential to

operation and management of the project in amounts approved by the

commissioner.

(b) A distribution not exceeding the maximum fixed by this article

upon the capital of the housing company allotted to the project by the

commissioner, and interest on income debentures.

(c) Where feasible in the discretion of the commissioner a sinking

fund in an amount to be fixed by the commissioner for the gradual

retirement of the capital, and income debentures of the housing company

to the extent permitted by this article. When tenants own shares or

income debentures in a housing company, a sinking fund may with the

approval and subject to the regulations of the commissioner be set up

and maintained out of the net profits applicable to surplus and used

subject to the regulations of the commissioner for the purchase at not

to exceed par and accrued interest of the shares and income debentures

held by tenants ceasing to be occupants of the buildings; shares so

purchased may be resold by the housing companies. The moneys payable by

the project to reimburse the commissioner for the expenses of

inspection, supervision and auditing as herein provided shall be paid to

the executive department. Letting, subletting or assignment of leases of

apartments in such buildings or structures at greater rentals than

prescribed by the order of the commissioner are prohibited and all such

leases shall be void for all purposes.

2. For the purpose of calculating rentals in such dwellings, alcoves,

dining bays, and similar accommodations where their existence is legally

permissible, and bathrooms in the case of apartments of three rooms or

less, may, in the discretion of the commissioner, be counted as half

rooms; bathrooms in apartments of four rooms or more shall not be

counted as rooms or half rooms.

3. In projects where the land is leased from a municipality the value

of the land shall be taken at a sum fixed by the board, body or officer

designated by the local legislative body and approved by the

commissioner. For all the purposes of this article (including the

provisions of section eighty-one) the determination of the actual or

estimated cost of projects involving leased lands shall be made on the

basis provided in section eighty-three and other sections of this

article in the case of projects involving land purchased in fee by a

housing company, except that in projects involving leased land the value

of the land leased, ascertained in the manner described above, shall be

used instead of the cost of the land in determining the total cost of

the land and improvements comprising the project. In projects involving

leased land, the rental, if any, during the period of construction may

be included as part of the cost of the project. The sections of this

article requiring the investment of at least one-fifth of the cost of

the projects capital and income debentures shall not apply to projects

involving leased land but in such projects the value of the land,

ascertained in the manner described above, plus the amount obtained by

the investment in the capital and income debentures of the housing

company shall be at least one-fifth of the cost of the project, and the

amounts, if any, to be raised by mortgage indebtedness shall not exceed

four-fifths of such cost.

§ 85-a — Selection of tenants and occupants

Selection of tenants and occupants. 1. The dwellings in a

housing company project, other than a mutual project, shall be available

(a) If such project was completed or acquired on or after July first,

nineteen hundred fifty-five, for persons or families whose probable

aggregate annual income at the time of admission does not exceed seven

times the rental (including the value or cost to them of heat, light,

water and cooking fuel) of the dwellings to be furnished such persons or

families, except that in the case of persons or families with three or

more dependents, such ratio shall not exceed eight to one;

(b) If such project was completed prior to July first, nineteen

hundred fifty-five, for persons or families whose probable aggregate

annual income at the time of admission does not exceed seven times the

rental (including the value or cost to them of heat, light, water and

cooking fuel) of the dwellings to be furnished such persons or families,

except that in the case of persons or families with three or more

dependents, such ratio shall not exceed eight to one;

(c) In the event that the income of a person or family residing in a

project increases and the ratio to the rental of the dwelling becomes

greater than prescribed by law for admission or in this subdivision,

whichever is greater, and the income is not more than fifty per centum

above the income so prescribed for admission to the dwelling and such

increased income continues for a period of three months or more, the

housing company may permit such person or family to continue to remain

in occupancy provided the housing company is convinced that such person

or family cannot secure other safe and sanitary dwelling accommodations,

or by reason of other facts the removal of such person or family from

the project would occasion other undue hardship to such person or

family. However, such person or family shall pay a rental surcharge in

accordance with a schedule of surcharges promulgated by the company with

the approval of the commissioner and in no event shall such removal be

effected against any person or family which was in occupancy prior to

July first, nineteen hundred eighty-three;

(d) In the event that the ratio of the income of a person or family to

the rental of the dwelling becomes greater than that prescribed by law

for admission or in this subdivision, whichever is greater, and is more

than fifty per centum above the income so prescribed for admission to

the dwelling and such increased income continues for a period of three

months, the housing company shall require such person or family to

remove from the dwelling and may take such steps, including summary

proceedings, as are necessary to effect the removal of the person or

family. A three months' period shall be given such person or family to

find new accommodations. Pending removal from the dwelling, such person

or family shall pay a rental surcharge in accordance with a schedule

promulgated by the company with the approval of the commissioner. In no

event shall a removal otherwise authorized by this paragraph be effected

against any person or family which was in occupancy prior to July first,

nineteen hundred eighty-three.

2. The dwellings in any mutual housing company project shall be

available

(a) In the case of such projects constructed or acquired on or after

July first, nineteen hundred fifty-five, for such persons or families

whose probable aggregate annual income during the period of occupancy

does not exceed, the greater of (i) the median income for such persons

or families for the metropolitan statistical area in which the project

is located, or if a project is located outside a metropolitan

statistical area, the median income for such persons or families for the

county in which the project is located, as most recently determined by

the United States department of housing and urban development, in which

case any person or family becoming eligible for admission pursuant to

this subparagraph shall pay, from the time of admission, a rental

surcharge as provided for in subdivision three of this section, computed

on the basis of the income limitations applicable to such persons or

families in the absence of this subparagraph, or (ii) seven times the

rental (including the value or cost to them of heat, light, water and

cooking fuel) of the dwellings to be furnished such persons or families,

except that in the case of persons or families with three or more

dependents, such ratio shall not exceed eight to one. For the purpose of

determining the eligibility of tenant cooperators in a mutual housing

company project, there shall be added to the total annual carrying

charges an amount equal to six per centum of the investment of a person

or family in the equity obligations of such housing company and, to the

extent authorized by the commissioner or the supervising agency as the

case may be, the value or cost to them of repainting and the replacement

of fixtures and appliances;

(b) In the case of such projects constructed prior to July first,

nineteen hundred fifty-five, for such persons or families whose probable

aggregate annual income during the period of occupancy does not exceed,

the greater of (i) the median income for such persons or families for

the metropolitan statistical area in which the project is located, or if

a project is located outside a metropolitan statistical area, the median

income for such persons or families for the county in which the project

is located, as most recently determined by the United States department

of housing and urban development, in which case any person or family

becoming eligible for admission pursuant to this subparagraph shall pay,

from the time of admission, a rental surcharge as provided for in

subdivision three of this section, computed on the basis of the income

limitations applicable to such persons or families in the absence of

this subparagraph, or (ii) seven times the rental (including the value

or cost to them of heat, light, water and cooking fuel) of the dwellings

to be furnished such persons or families, except that in the case of

persons or families with three or more dependents, such ratio shall not

exceed eight to one; provided, however, that, in the discretion of the

commissioner upon application of the mutual housing company, the income

limitations set forth in paragraph (a) of this subdivision shall be

applicable to such projects, and, in such case, investment in the equity

obligations of such housing companies shall include: the value of the

stock of said housing company at time of purchase; all moneys paid

towards the rental of the dwellings which are allocated to the reduction

of the principal amount of the mortgage loan secured by a mortgage lien

on the real property of the housing company; and all accruals to equity,

approved by the commissioner, resulting from capital improvements;

(c) The limitations as to income contained hereinabove in paragraphs

(a) and (b) of this subsection shall not apply in mutual housing company

projects after the period of municipal tax exemption of such project has

expired, and provided the commissioner has waived his rights over the

control of rentals and selection of tenants under this article;

(d) No occupant whose income increases shall be compelled to vacate

the project unless the ratio of his income to rental of the dwelling

becomes greater by fifty per centum or more than is prescribed by law at

the time of admission or in this subdivision, whichever is greater, and

unless at the same time he shall be discharged from all liability on any

note, bond or other evidence of indebtedness relating thereto, and there

shall be repaid to such person by the housing company all sums paid to

such company for or on account of the purchase of stock or income

debentures as a condition of such occupancy. The housing company may,

with the approval of the commissioner, permit such occupant whose income

increases and the ratio of income to rental of the dwelling becomes

greater by fifty per centum or more than is prescribed by law at the

time of admission or in this subdivision, whichever is greater, to

occupy the dwelling for not more than three years from the time such

increase in income first accrues unless such occupancy is extended with

the approval of the commissioner. In no event shall a removal otherwise

authorized by this paragraph be effected against any person or family

which has been in occupancy prior to July first, nineteen hundred

eighty-three. However, such occupant shall pay a rental surcharge in

accordance with a schedule of surcharges promulgated by the company with

the approval of the commissioner.

3. Twenty-five per centum of rental surcharges collected pursuant to

this section on account of rentals payable prior to July first, nineteen

hundred eighty-three shall be paid by the company to the municipality

which has granted tax exemption pursuant to section ninety-three of this

article as a credit against the grant of tax exemption, the value of

such tax exemption and of such credit to be determined on an individual

dwelling unit basis. In the event that such tax exemption has not been

granted, or in the event the period of tax exemption has expired, or in

the event that a sum equal to the total of all accrued taxes as to

individual dwelling units where such tax exemption was granted have been

paid to the municipality, the excess, if any, of surcharges and all

surcharges imposed after June thirtieth, nineteen hundred eighty-three

shall be applied to the expenses of operation and management as approved

by the commissioner.

4. The commissioner may approve or disapprove an application for a

lease in accordance with the income limits prescribed herein and, where

there is discrimination in violation of section six hundred two of this

chapter, may compel a housing company to grant a lease or renewal

thereof to a person or family as a tenant in the project.

5. The "probable aggregate annual income" means the annual income of

the chief wage earner of the family plus all other income of members of

the family over the age of twenty-one years, plus a proportion of the

income of members under the age of twenty-one years to be determined by

the commissioner, excluding therefrom a deduction of fifteen thousand

dollars from the income of secondary wage earners of the family or a

larger deduction if approved by the commissioner or the supervising

agency, as the case may be, except that the company, as approved by the

commissioner, may exclude a proportion of the income of other members of

the family over the age of twenty-one years for the purpose of

determining eligibility for admission or continued occupancy, or for

establishing the rental of such family, or for all such purposes.

6. A company may rent one or more dwelling units to a social services

official or duly authorized agency, as defined in section three hundred

seventy-one of the social services law, for the operation of agency

boarding homes or group homes or to any public agency as defined in

section four hundred sixty-one of the general municipal law, which

provides residences and social services to dependent aged persons.

7. (a) For the purpose of enabling lower income elderly persons to

continue in occupancy without paying rentals in excess of a fair

proportion of their income, any municipality having a population of less

than one million is authorized to make and to contract to make periodic

payments to a company in an amount not exceeding the difference between

the rent or carrying charges for the dwellings occupied by such lower

income persons and one-third of their net probable aggregate annual

income, where such rent or carrying charges exceed such one-third of

income; provided that the aggregate amount of periodic payments to be

made in accordance with contracts entered into by the municipality

during any fiscal year thereof pursuant to this subdivision, subdivision

nine of section thirty-one, section one hundred twenty-six and section

five hundred seventy-seven-a of this chapter shall not exceed the

aggregate amount of all real property taxes paid or payable during such

fiscal year by all companies organized pursuant to this article, article

II, article V and article XI of this chapter and the aggregate estimated

receipts of all such companies in such fiscal year from rental

surcharges collected or to be collected pursuant to this chapter.

(b) Such payments shall be made only on account of a person or family

in occupancy where the head of the household is sixty-two years of age

or older and is not a recipient of public assistance pursuant to the

social services law, and where the net probable aggregate annual income

of the person or family in occupancy does not exceed six thousand five

hundred dollars a year. Notwithstanding the provisions of subdivision

twenty-nine of section two of this chapter net probable aggregate annual

income as used in this subdivision shall mean annual income of family

members from all sources after deduction of federal, state and city

income taxes; provided that any municipality may provide that increases

in benefits under the social security act which take effect after such

person or family has assumed occupancy shall not be taken into account.

(c) A company having a contract with the municipality pursuant to this

subdivision may not collect from persons or families in occupancy on

whose account such payments are made any rentals in excess of the

amounts specified in such contract.

8. Notwithstanding the provisions of this section, persons or families

with two or more dependents whose probable aggregate annual income does

not exceed one hundred twenty-five percent of the limitations as to

income applicable without reference to this subdivision, shall also be

eligible for admission to the project on the understanding that any

person or family becoming eligible by reason hereof, shall pay from the

time of admission a rental surcharge computed on the basis of the income

ratios applicable to such person or family in the absence of this

subdivision. In applying the provisions of paragraphs (c) and (d) of

subdivision one and of paragraph (d) of subdivision two of this section

to a family becoming eligible by reason of this subdivision, the "ratio

prescribed by law" shall mean such ratio as would be prescribed in the

absence of this subdivision.

9. Notwithstanding the provisions of this section or any law to the

contrary, any limited dividend mutual housing company which:

(a) owns or operates a project or projects that are located in the

county of Queens and were constructed or acquired prior to July first,

nineteen hundred sixty-five; and

(b) did not receive a loan, construction subsidy, mortgage, mortgage

guarantee or any other form of financial assistance from the state of

New York or from any state agency, authority or public benefit

corporation created by the state; and

(c) is no longer required to pay rental surcharges to the municipality

in which it is located; and

(d) has commenced paying real property taxes on the value of the land

and improvements pursuant to a resolution adopted by the governing body

of the municipality in which it is located; and

(e) has determined, by a two-thirds vote of the directors of the

housing company taken on or before July first of each year that rental

surcharges based on incomes of persons or families residing in the

project, as specified in this article or any other provision of law, are

not required for the purpose of maintaining or operating said project or

projects. Any such vote shall be preceded by a timely notice to the

project's shareholders that such vote will take place;

shall be excused from undertaking a survey of the aggregate and

individual annual incomes of persons or families residing in such

project or projects constructed or acquired by such housing company, and

shall not be required to impose rental surcharges based on the incomes

of such persons or families.

10. A housing company shall accept federal reimbursement under section

eight of the Housing and Community Development Act of 1974 in lieu of

such amount in rent payment for a person qualifying under such act and

residing in a project of such company. A housing company shall not

reject an applicant for an apartment solely on the basis that all or

part of the rent shall be paid under section eight of the Housing and

Community Development Act of 1974.

§ 85-b — Resale price of shares

Resale price of shares. Notwithstanding any other provision of

this article and subject to any regulation not inconsistent with this

section which may be promulgated by the commissioner:

(a) The resale price of shares in a mutual company shall be fixed by

the mutual company, subject to the approval of the commissioner, and

shall be equal to (1) the consideration the selling tenant-cooperator

paid for such shares and (2) any capital assessments and voluntary

capital contributions approved by the commissioner and paid by the

selling tenant-cooperator to the mutual company, to the extent not

already included in the consideration paid for such shares, and, if

established by the mutual company, (3) a proportionate share of the

actual aggregate amortization paid on all existing and prior mortgages

on the project in reduction of total outstanding principal indebtedness

during such period as shall be fixed by the board of directors of the

mutual company, to the extent not already included in the consideration

paid for such shares, and (4) reasonable administrative charges.

(b) The aggregate amount to be paid to the selling tenant-cooperator

with respect to the sale of the selling tenant-cooperator's shares shall

be fixed by the board of directors of the mutual company, subject to the

approval of the commissioner, and shall be equal to (1) the

consideration the selling tenant-cooperator paid for such shares, (2)

any capital assessments and voluntary capital contributions approved by

the commissioner and paid by the selling tenant-cooperator to the mutual

company, to the extent not already included in the consideration paid

for such shares, and (3) a proportionate share of the actual aggregate

amortization paid by the selling tenant-cooperator on all existing and

prior mortgages on the project in reduction of total outstanding

principal indebtedness during such period as shall be fixed by the board

of directors pursuant to subdivision (a) of this section, to the extent

not already included in the consideration paid for such shares. To the

extent that a selling tenant-cooperator may be entitled to an amount

less than the resale price of his shares, the difference shall be

retained by the mutual company.

(c) The board of directors may, subject to the approval of the

commissioner, establish a general policy pursuant to which a selling

tenant-cooperator who had occupied more than one dwelling unit is paid

an amount measured by his proportionate share of the actual aggregate

amortization paid during his period of occupancy on all existing or

prior mortgages on the project. To the extent that a selling

tenant-cooperator may be entitled to an amount greater than the resale

price of shares, the difference may be paid to the selling

tenant-cooperator by the mutual company.

(d) The "proportionate share of the actual aggregate amortization paid

on all existing and prior mortgages on the project" referred to in

subdivision (a) of this section shall be in the same ratio to such

actual aggregate amortization as the number of shares held by the

selling tenant-cooperator at the time of sale bears to the total number

of shares of issued and outstanding capital stock of the mutual company

during such period.

(e) Nothing contained in this section shall prohibit the continued use

of any method of calculating resale price adopted by a mutual company

and approved by the commissioner prior to the effective date of this

section.

§ 86 — Reduction of rentals in housing company projects

Reduction of rentals in housing company projects. If in any

calendar or fiscal year the gross receipts of any housing company should

exceed the payments or charges specified in section eighty-five, the

sums necessary to pay distributions or interest accrued or unpaid on any

shares, income debentures or other capital, and the authorized transfer

to surplus, the balance shall, unless the board of directors, the

partners or the trustees, as the case may be, with the approval of the

commissioner shall deem such balance too small for the purpose, be

applied to the reduction of rentals, for such year or years as the

commissioner may specify, or to the further reduction of any mortgage

indebtedness, or both, as the commissioner may determine.

§ 87 — Increase of rentals in housing company projects

Increase of rentals in housing company projects. Whenever it

shall appear that the interests of lienholders, creditors, debenture

holders, shareholders, partners or beneficiaries cannot otherwise be

safeguarded, the commissioner shall, notwithstanding the limitation

prescribed in this article upon maximum average rental, have power by

his order made upon written application of a housing company or of a

lienholder, a creditor, or of holders of ten per centum of the income

debentures of the housing company, or, in the case of a housing company

which is a corporation, the holders of ten per centum of the shares, or,

in the case of a housing company which is a partnership, the partners

having an interest in capital equal to ten per centum thereof, or, in

the case of a housing company which is a trust, the beneficiaries having

a beneficial interest in capital equal to ten per centum thereof, to

authorize such housing company to increase rentals beyond the maximum

provided in this article as follows:

(a) If the application is made before occupancy of the dwellings

embraced in the project and it is shown to the satisfaction of the

commissioner that owing to causes beyond the control of the housing

company or contingencies which in the opinion of the commissioner could

not reasonably have been anticipated, the maximum rentals are

insufficient to meet the payments authorized in section eighty-five in

which event the commissioner may authorize an increase in the minimum

amount necessary to enable such housing company to make such payments.

(b) If the application is made after occupancy the order shall be made

only after a public hearing. Said hearing shall be held upon no less

than twenty days' written notice to the tenants and such notice shall

have annexed thereto a copy of the application for increase in rentals.

No such order or authorization shall be made or given unless the

commissioner shall find that because of changes in economic conditions

in their application to the project with respect to which request for

increased rentals shall have been made or because of special assessments

or causes or contingencies beyond the control of the housing company,

affecting such project, the maximum rentals fixed as herein provided are

insufficient to meet the payments authorized in section eighty-five of

this article and unless the commissioner shall find that such

insufficiency cannot be corrected by reasonable economies in management

and operation of said project. The commissioner shall not authorize any

increase in rentals in excess of the minimum amount necessary to enable

the said housing company to make the said payments authorized in section

eighty-five. Any order by the commissioner shall be final and conclusive

upon all questions within his jurisdiction, with respect to the project

affected thereby, unless reversed or modified on appeal therefrom as

hereinafter provided. Within thirty days after notice of the filing of

the order of the commissioner has been sent to the said housing company

and served upon the said tenants affected thereby in such manner as the

commissioner shall prescribe, an appeal may be taken to the appellate

division of the supreme court in the department in which the project

affected by the order is located, from such order of the commissioner by

any party in interest. If notice of such appeal is served upon the

commissioner, he shall, within thirty days thereafter, serve upon the

parties in interest a statement of his conclusions of fact and rulings

of law in such case. The commissioner may also in his discretion certify

to such appellate division of the supreme court questions of law

involved in his order. Such appeal and the questions so certified shall

be heard in a summary manner and shall have precedence over all other

civil cases in such court. The commissioner shall be deemed a party to

every such appeal.

An appeal may also be taken by the commissioner or by any party in

interest to the court of appeals in the same manner and subject to the

same limitations as is now provided in civil actions. It shall not be

necessary to file exceptions to the rulings of the commissioner. The

commissioner shall not be required to file a bond upon an appeal by him

to the court of appeals. Upon final determination of such an appeal, the

commissioner shall enter an order in accordance therewith.

§ 88 — Surplus

Surplus. The amount of net earnings transferable to surplus in

any year after making or providing for the payments specified in items

(a), (b) and (c) of subdivision one of section eighty-five of this

article shall be subject to the approval of the commissioner. The amount

of such surplus shall not exceed twelve per centum of the outstanding

capital and income debentures of the housing company, but the surplus so

limited shall not be deemed to include any increase in assets due to

reduction of mortgage or amortization or similar payments. On

dissolution of any housing company, organized as a corporation, the

shareholders shall in no event receive more than the par value of their

shares plus accumulated, accrued or unpaid dividends at the rate of six

per centum per annum; on dissolution of a housing company organized as a

partnership, the partners shall in no event receive more than the value

of their paid in capital plus accumulated, accrued or unpaid

distributions on capital at the rate of six per centum per annum; on

termination of a housing company organized as a trust, the beneficiaries

shall in no event receive more than the value of the money or property

subject to the trust plus accumulated, accrued or unpaid distributions

on capital at the rate of six per centum per annum; on dissolution of

any housing company income debenture holders shall in no event receive

more than the face value of income debentures outstanding plus

accumulated, accrued and unpaid interest at the rate of six per centum

per annum. Any remaining surplus shall be paid into the general fund of

the state of New York, if the buildings and the improvements of the

project have not received exemption from taxation by the municipality

pursuant to subdivision three or four of section ninety-three and if the

company has not received a loan from the municipality, but if such tax

exemption or loan has been received, any remaining surplus shall be paid

into the general fund of the municipality.

§ 89 — Consolidated projects; operation of more than one project

Consolidated projects; operation of more than one project. The

commissioner may permit the consolidation of two or more approved

projects or the extension or amendment of any approved project or the

consolidation of any approved project with a proposed project. In any of

these events, the consolidated project shall be treated as an original

project and an application shall be submitted as in the case of an

original project and rents and costs may be averaged throughout the

consolidated or extended project. The commissioner may likewise permit

any housing company to organize and operate more than one project or to

take over any project heretofore approved by the commissioner and to

operate it independently of other projects of the housing company. The

commissioner may in his discretion decline to permit more than one

project to be operated by the same housing company.

§ 90 — Purchase by housing companies

Purchase by housing companies. Before any housing company shall

purchase the property of any other housing company, it shall file an

application with the commissioner in the manner hereinbefore provided as

for a new project and shall obtain the consent of the commissioner to

the purchase and agree to be bound by the provisions of this article and

the commissioner shall not give his consent unless it is shown to the

satisfaction of the commissioner that the project is one that can be

successfully operated according to the provisions of this article.

§ 91 — Proceedings against housing companies

Proceedings against housing companies. 1. Whenever the

commissioner shall be of the opinion that a housing company is failing

or omitting, or is about to fail or omit to do anything required of it

by law or by order of the commissioner or is doing or is about to do

anything, or permitting anything, or is about to permit anything to be

done, contrary to and in violation of law or of any order of the

commissioner, or which is improvident or prejudicial to the interest of

the public, the lienholders, the shareholders, partners, beneficiaries

or the tenants, the commissioner shall commence an action or proceeding

in the supreme court of the state of New York in the name of the

commissioner, in accordance with the provisions of the civil practice

law and rules for the purpose of having such violations or threatened

violations stopped and prevented, and in such action or proceeding, the

court may appoint a temporary or permanent receiver or both. Such action

or proceeding shall be commenced by a petition to the supreme court,

alleging the violation complained of and praying for appropriate relief.

It shall thereupon be the duty of the court to specify the time, not

exceeding twenty days after service of a copy of the petition, within

which the housing company complained of must answer the petition. In

case of default in answer or after answer the court shall immediately

inquire into the facts and circumstances in such manner as the court

shall direct without other or formal pleadings, and without respect to

any technical requirements. Such other persons or corporations as it

shall seem to the court necessary or proper to join as parties in order

to make its order or judgment effective, may be joined as parties. The

final judgment in any such action or proceeding shall either dismiss the

action or proceeding or direct that an order or an injunction, or both,

issue, or provide for the appointment of a receiver as prayed for in the

petition, or grant such other relief as the court may deem appropriate.

2. In the event that a municipality shall make a loan to a housing

company, the municipality, as well as the commissioner, shall have the

powers enumerated in subdivision one of this section.

§ 92 — Reorganization

Reorganization. 1. Reorganization of housing companies shall be

subject to the supervision and control of the commissioner and no such

reorganization shall be had without the authorization of the

commissioner.

2. Upon all such reorganizations the capital structure of the housing

company shall be subject to the approval of the commissioner in

accordance with the provisions of section seventy-eight of this article.

§ 93 — Tax exemptions

Tax exemptions. 1. Any housing company shall be exempt from the

payment of any and all franchise, organization, income, mortgage

recording and other taxes to the state and all fees to the state or its

officers.

2. Bonds and mortgages and the income debenture certificates of all

housing companies are declared to be instrumentalities of the state,

issued for public purposes and shall, together with interest thereon, be

exempt from taxation. Distributions on capital of said companies shall

be exempt from taxation by the state.

3. Any municipality in which projects of housing companies are located

is authorized to exempt the buildings and improvements created in

connection with such projects from local taxation, and should said

municipality exempt such buildings and improvements from such taxation

the buildings and improvements of said company shall to the extent of

such exemption be exempt from any and all state taxation. This provision

shall apply only to projects completed prior to January first, nineteen

hundred thirty-nine.

4. Any municipality in which projects of housing companies are located

is authorized, through its local legislative body, to exempt from local

and municipal taxes, other than assessments for local improvements, all

or part of the value of the property included in any such projects as

represents an increase over the assessed valuation of the real property,

both land and improvements, acquired for the project at the time of its

acquisition by the housing company which originally undertook the

project; and should a municipality grant such tax exemption, all

projects of housing companies shall to the extent of such municipal

exemption and during the period thereof, be exempt from any and all

state taxes. Such exemption of projects from taxation by a municipality

and the state shall not extend to projects erected prior to January

first, nineteen hundred thirty-nine nor to projects erected after

January first, nineteen hundred seventy-three and prior to January

first, nineteen hundred seventy-nine.

5. The tax exemption specified in subdivisions three and four of this

section shall not operate for a period of more than fifty years,

commencing in each instance from the date on which the benefits of such

exemption first become available and effective.

6. Notwithstanding the provisions of subdivisions four and five of

this section, the real property owned, acquired, leased, managed or

operated by a state urban development corporation project shall be

exempt from all local and municipal taxes, other than assessment for

local improvements, to the extent of the value of the property included

in such project as represents an increase over the assessed valuation of

the real property, both land and improvements acquired for the project

on the date of its acquisition by the housing company. The tax exemption

shall operate and continue so long as the mortgage loans of such

limited-dividend housing company are outstanding, but in no event for a

period of more than forty years, commencing in each instance from the

date when such limited-dividend housing company first acquired such

property. If a state urban development corporation project qualifying

for tax exemption pursuant to this subdivision is sold, with the

approval of the commissioner, to another limited-dividend housing

company, such successor company shall be entitled to all the benefits of

this subdivision.

7. Any project that received a tax exemption under this section may,

upon the expiration of the tax exemption period, be granted an

additional tax exemption period of up to fifty years, or until such time

as the project is no longer operated under the restrictions and for the

purposes set forth in this article, whichever is sooner.

8. Notwithstanding any other provision of this section, the maximum

combined local and municipal taxes, other than assessments for local

improvements, that a project operated by a housing company established

pursuant to this article, and which is eligible for a tax exemption

pursuant to any other subdivision of this section, shall be required to

pay in a city with a population of one million or more shall be no more

than the equivalent of five per centum of the annual shelter rent or

carrying charges of such project. Upon the consent of the local

legislative body of the municipality, other than a city with a

population of one million or more, in which the project is located, the

amount of such taxes may be further reduced to five per centum or less

of the annual shelter rent or carrying charges of the project. Any such

granted consent to reduce the amount of such taxes shall expire every

ten years. If such authorization is not renewed, the rate of taxation

shall revert to the level established before the consent was granted.

For the purposes of this subdivision, "shelter rent" shall have the same

meaning as such term is defined to have in paragraph a of subdivision

one of section thirty-three of this chapter.

§ 94 — Foreclosure

Foreclosure. 1. In any foreclosure action the commissioner, and

the municipality if it has made a loan to the housing company, in

addition to other necessary parties, shall be made parties defendant;

and the commissioner and the municipality shall take all steps in such

action necessary to protect the interest of the public therein, and no

costs shall be awarded against him or the municipality. Foreclosure

shall not be decreed unless the court to which application therefor is

made shall be satisfied that the interests of the lienholder or holders

can not be adequately secured or safeguarded except by the sale of the

property. In any such proceeding, the court shall be authorized to make

an order increasing the rentals to be charged for the housing

accommodations in the project involved in such foreclosure, but not

exceeding the maximum average rentals fixed herein, or appoint the

commissioner as a receiver of the property and in the event the

municipality has made a loan to the housing company, appoint an officer

or employee of the municipality, or grant such other and further relief

as may be reasonable and proper. In the event of a foreclosure sale or

other judicial sale, the property shall, except as provided in the next

succeeding paragraph of this section, be sold only to a housing company,

unless the court shall find that the interest on the bonds cannot be

earned under the restrictions imposed by the provisions of this article

and that the proceeding was brought in good faith. In such event the

property shall be sold free of all restrictions imposed by this article

and all the benefits theretofore granted under this article to such

project shall thereupon terminate.

2. Notwithstanding the foregoing provisions of this section, wherever

it shall appear that a government, the New York state housing finance

agency, the New York state urban development corporation, created by the

New York state urban development corporation act, the New York city

housing development corporation, Battery Park city authority, an

organization or entity investing or participating in a loan pursuant to

subdivision one of section fifteen of this chapter, or a corporation

subject to the supervision of the state department of financial

services, shall have loaned on a mortgage which is a lien upon any such

property, such government, New York state housing finance agency, New

York state urban development corporation, New York city housing

development corporation, Battery Park city authority, an organization or

entity investing or participating in a loan pursuant to said section

fifteen or a corporation subject to such supervision, or any trustee or

trustees, or any successor trustee or trustees, for the benefit of any

one or more of the aforesaid classes shall have all the remedies

available to a mortgagee under the laws of the state of New York, free

from any restrictions contained in this section except that the

commissioner shall be made a party defendant and that the commissioner

shall take all steps necessary to protect the interests of the public

and no costs shall be awarded against him or her

§ 95 — Judgments against housing companies not relating to mortgage indebtedness

Judgments against housing companies not relating to mortgage

indebtedness. In the event of a judgment against a housing company in

any action not pertaining to the collection of a mortgage indebtedness,

there shall be no sale of any of the real property of such housing

company except upon sixty days' written notice to the commissioner and,

if the municipality has made a loan to the housing company, to the

municipality in which the project is located. Upon receipt of such

notice the commissioner and the municipality shall take such steps as in

its judgment may be necessary to protect the rights of all parties.

§ 96 — Voluntary dissolution

Voluntary dissolution. 1. Notwithstanding any provisions in

this article to the contrary, a housing company organized pursuant to

this article after April first, nineteen hundred sixty-two, may

voluntarily be dissolved, or in the case of a housing company which is a

trust, be terminated, without the consent of the commissioner, not less

than twenty years after the occupancy date upon the payment in full of

the remaining balance of principal and interest due and unpaid upon the

mortgage or mortgages and of any and all expenses incurred in

effectuating such voluntary dissolution or termination.

2. Upon such dissolution or termination, title to the project may be

conveyed in fee to the owner or owners of its capital or to any

corporation, partnership or trust designated by it or them for the

purpose, or the company may be reconstituted pursuant to appropriate

laws relating to the formation and conduct of corporations, partnerships

or trusts, provided, however, that prior to any such dissolution or

termination and conveyance or reconstitution payment shall be made of

all current operating expenses, taxes, indebtedness and all accrued

interest thereon and the par value of the shares or amount of the

capital of such company and accrued distributions in respect thereof.

If after making such payments and after conveyance of the project, a

surplus remains in the treasury of the housing company, such surplus

shall, upon dissolution or termination be distributed to the

shareholders, partners or beneficiaries, as their interests may appear.

After such dissolution or termination and conveyance, or such

reconstitution, the provisions of this article shall become and be

inapplicable to any such project and its owner or owners, and any tax

exemption granted with respect to such project pursuant to section

ninety-three hereof shall cease and terminate.

§ 97 — Corporations in existence prior to enactment of article

Corporations in existence prior to enactment of article.

Nothing in this article contained shall be deemed to require the

reincorporation of any public limited dividend housing company or any

private limited dividend housing company heretofore organized under the

provisions of chapter eight hundred twenty-three of the laws of nineteen

hundred twenty-six, entitled "state housing law," as amended prior to

the enactment of this article, nor to alter or affect any rights,

privileges, powers, benefits, or immunities granted to such corporations

by the provisions of any law, general, special or local. Such housing

companies shall exist, continue to function and they and their

stockholders, debenture holders, tenants, mortgagees, creditors and all

other persons having an interest therein shall possess the powers,

rights and privileges, be subject to the duties, restrictions and

liabilities, of this article, provided that the legality, terms, rights,

duties, limitations, privileges and immunities with respect to rents,

dividend returns, mortgage interest, state and local tax exemptions and

investments in such companies heretofore made and of transactions

heretofore had by such companies shall not be affected by the provisions

of this article, but the same shall continue to be governed by the

provisions of chapter eight hundred twenty-three of the laws of nineteen

hundred twenty-six and amendatory acts thereto, and for such purposes,

such chapter and amendatory acts thereto shall continue to be in full

force and effect.

ARTICLE 5 Redevelopment Companies

§ 100 — Short title

Short title. This article shall be known and may be cited and

referred to as the "Redevelopment Companies Law."

§ 101 — Policy of state and purpose of act

Policy of state and purpose of act. It is hereby declared

that in certain areas of municipalities located within this state there

exist substandard conditions and insanitary housing conditions owing to

obsolescence, deterioration and dilapidation of buildings, or excessive

land coverage, lack of planning, of public facilities, of sufficient

light, air and space, and improper design and arrangement of living

quarters; that there is not in such areas a sufficient supply of

adequate, safe and sanitary dwelling accommodations properly planned and

related to public facilities; that modern standards of urban life

require the housing be related to adequate and convenient public

facilities; that the aforesaid substandard and insanitary conditions

depress and destroy the economic value of large areas and by impairing

the value of private investments threaten the sources of public

revenues; that the public interest requires the clearance, replanning,

reconstruction and neighborhood rehabilitation of such substandard and

insanitary areas, together with adequate provision for recreational and

other facilities incidental and appurtenant thereto according to the

requirements of modern urban life and that such clearance, replanning,

reconstruction and neighborhood rehabilitation are essential to the

protection of the financial stability of such municipalities; that in

order to protect the sources of public revenue it is necessary to

modernize the physical plan and conditions of urban life; that these

conditions cannot be remedied by the ordinary operations of private

enterprise; that provision must be made to encourage the investment of

funds in corporations, partnerships and trusts engaged in providing

redevelopment facilities to be constructed according to the requirements

of city planning and in effectuation of official city plans and

regulated by law as to profits, dividends and disposition of their

property or franchises; that provision must be made to enable insurance

companies to provide such facilities, subject to regulation by law as to

the return from such facilities and the disposition of property acquired

for such purpose; and that provision must also be made for the

acquisition for such corporations, partnerships, limited liability

companies and trusts and companies at fair prices of real property

required for such purposes in substandard areas and for public

assistance of such corporations, partnerships and trusts and such

companies by the granting of partial tax exemptions; that the

cooperation of the state and its subdivisions is necessary to accomplish

such purposes; that the clearance, replanning and reconstruction,

rehabilitation and modernization of substandard and insanitary areas and

the provision of adequate, safe, sanitary and properly planned housing

accommodations in effectuation of official city plans by such

corporations, partnerships, limited liability companies and trusts and

such companies in these areas are public uses and purposes for which

private property may be acquired for such corporations, partnerships,

limited liability companies and trusts and such companies and partial

tax exemption granted for such corporations, partnerships, limited

liability companies and trusts and such companies; that these conditions

require the creation of the agencies, instrumentalities, corporations,

partnerships and trusts hereinafter prescribed for the purpose of

attaining the ends herein recited; and the necessity in the public

interest for the provisions hereinafter enacted is hereby declared as a

matter of legislative determination.

§ 102 — Definitions

Definitions. As used in this article, the following terms shall

mean and include:

1. "Project." A specific work or improvement to effectuate all or any

part of a plan including lands, buildings and improvements acquired,

owned, constructed, managed or operated in an area by a redevelopment

company or an insurance company providing dwelling accommodations

pursuant to this article and such business, commercial, cultural or

recreational facilities appurtenant thereto as may be approved pursuant

to section one hundred fourteen of this article.

2. "Supervising agency." The municipal comptroller in a municipality

having a comptroller; in a municipality having no comptroller the chief

financial officer of such municipality; except that in the city of New

York it shall be the department of housing preservation and development.

However, as to any insurance company providing dwelling accommodations

pursuant to this article, or if any of the stock and income debenture

certificates having voting power of a redevelopment company are or are

to be issued to one or more insurance companies, the term shall mean

only the superintendent of financial services.

3. "Local and municipal taxes." Taxes levied by a county, city,

village, town, school and special district but shall not include

assessments for local improvements.

3-a. "Redevelopment company." A corporation, partnership (general or

limited), limited liability companies or trust created as provided in

section one hundred three of this article.

4. "Capital." In the case of a corporation, the capital shares of that

corporation for the time being issued and outstanding; in the case of a

partnership, the aggregate value of the money and property contributed

by the partners for the purpose of carrying on the business of the

partnership, so far as such is credited to the partners on capital

account; in the case of a limited liability company, the aggregate value

of the money and property contributed by the members for the purpose of

carrying on the business of the company; and in the case of a trust, the

aggregate value of the money or property subject to the trust.

5. "Federally-aided mortgage." A mortgage loan made or insured by the

federal government or any agency or instrumentality thereof or a

mortgage loan entered into in conjunction with a housing assistance

payments contract in connection with new construction or substantial

rehabilitation or moderate rehabilitation pursuant to section eight of

the United States housing act of 1937, as amended.

6. The term "mutual" when applied to a redevelopment company shall

mean a redevelopment company which is a corporation operated exclusively

for the benefit of the persons or families who are entitled to occupancy

in a project of such redevelopment company by reason of ownership of

shares in such redevelopment company.

§ 103 — Redevelopment companies; how created

Redevelopment companies; how created. 1. A redevelopment

company may be created as a corporation by three or more persons

signing, acknowledging and filing a certificate which shall contain:

(1) The name of the proposed redevelopment company.

(2) The purposes for which it is to be formed which shall be as

follows: To acquire one or more areas under a plan or plans, and to

construct, own, maintain, operate, sell and convey projects pursuant to

the terms and provisions of this article.

(3) The amount of the capital shares, and if any be preferred shares,

the preference thereof.

(4) The number of shares of which the capital shall consist, all of

which shall have a par value.

(5) The city, village or town in which its principal business office

is to be located; if located in the city of New York, the borough

thereof in which it is to be located.

(6) Its duration, which shall not be less than twenty years.

(7) The number of directors, which shall not be less than three and

who need not be shareholders. One additional director may be designated

by the supervising agency, and, in the case of all mutual companies,

such additional director shall be designated by the supervising agency

at the creation of the company and shall serve from the time of such

designation at least until a board of directors has been elected by the

tenants entitled to occupancy in the project by reason of ownership of

shares in such company. The directors appointed by the supervising

agency need not meet any of the qualifications prescribed in the

certificate of incorporation or the by-laws, and in the absence of fraud

or bad faith shall not be personally liable for the debts, obligations

or liabilities of the corporation.

(8) The names and post-office addresses of the directors for the first

year.

(9) The names and post-office addresses of the subscribers to the

certificate and a statement of the number of shares which each agrees to

take in the redevelopment company.

(10) A provision that, so long as this article shall remain applicable

to any project of the redevelopment company, the real property of the

redevelopment company shall not be sold, transferred or assigned except

as permitted by the terms and provisions of this article.

(11) A declaration that all of the subscribers to the certificate are

of full age; that at least two-thirds of them are citizens of the United

States and that at least one of them is a resident of the state of New

York; that at least one of the persons named as a director is a citizen

of the United States and a resident of the state of New York.

(12) A declaration that the redevelopment company has been organized

to serve a public purpose and that it shall be and remain subject to the

supervision and control of the supervising agency except as provided in

this article, so long as this article remains applicable to any project

of the redevelopment company; that all real and personal property

acquired by it and all structures erected by it, shall be deemed to be

acquired or created for the promotion of the purposes of this article.

(13) A declaration that, upon the dissolution of the company pursuant

to the provisions of subdivision one of section one hundred

twenty-three, the property may be conveyed in fee as provided in said

subdivision.

(14) A declaration that mortgage indebtedness, income debenture

certificates and capital of the redevelopment company may be retired if,

as and when there shall be funds available for amortization purposes in

the treasury of the redevelopment company.

(15) A declaration that in the event of a violation by a company of a

provision of its certificate or of law or any rules and regulations

promulgated pursuant to the provisions of this article, the supervising

agency may, by written notice, as provided by this article, advise the

directors, partners or trustees, as the case may be, of the company of

its desire to remove any or all of the existing directors or to appoint

a manager or managers of the partnership or trust who shall exclusively

exercise all of the powers of such partners or trustees, as the case may

be, for the duration of the appointment of such manager or managers. In

the event that the company fails to comply with the requirements of the

supervising agency within thirty days from date of mailing of said

written notice, the supervising agency may, with the written approval of

any mortgagee and without further notice to the company or to its

directors, partners or trustees, as the case may be, remove such

directors in the case of a redevelopment company which is a corporation

or any of them from office and appoint such person or persons as the

supervising agency, in its sole discretion, deems advisable, including

officers or employees of the supervising agency, as new directors to

serve in the places of those removed or appoint such manager or managers

in the case of a redevelopment company which is a partnersnip or trust

who shall exclusively exercise all of the powers of such partners or

trustees, as the case may be. Directors or managers so appointed need

not meet qualifications which may be prescribed by the certificate,

by-laws, partnership or trust agreement, or other rules or regulations

of the company. In the absence of fraud or bad faith, directors or

managers so appointed shall not be personally liable for debts,

obligations or liabilities of the company. Directors or managers so

appointed shall serve only for a period coexistent with the duration of

such violation or until the supervising agency is assured, in a manner

satisfactory to it, against violations of a similar nature. Officers or

employees of the supervising agency who are appointed as such directors

or managers shall serve in such capacity without compensation.

(16) A designation of the secretary of state as agent of the

corporation upon whom process against it may be served and the post

office address within or without this state to which the secretary of

state shall mail a copy of any process against it served upon him.

(17) If the corporation is to have a registered agent, his name and

address within this state and a statement that the registered agent is

to be the agent of the corporation upon whom process against it may be

served.

2. (1) A redevelopment company may be created as a general partnership

by the partners signing, acknowledging and filing as hereinafter

provided a certificate which shall contain:

(a) The matters set out in paragraphs one, two, five, six, ten,

twelve, thirteen, fourteen and fifteen of subdivision one of this

section.

(b) The names and post-office addresses of the partners.

(c) A statement of the capital of the partnership.

(d) As to all the partners who are individuals, a declaration that (i)

all such partners are of full age; (ii) all of them if there be no more

than two and at least two-thirds of them if there be more than two are

citizens of the United States; and (iii) at least one of them is a

resident of the state of New York; and as to all partners which are

corporations, a declaration that each such corporation is either

incorporated under the laws of the state of New York or is a foreign

corporation duly authorized to do business in the state of New York.

(2) A redevelopment company may be created as a limited partnership by

the partners filing as provided herein a copy of the certificate filed

with the county clerk pursuant to article eight of the partnership law.

The partners shall at the same time sign, acknowledge and file a further

certificate which shall contain the matters set out in paragraphs one,

two, five, six, ten, twelve, thirteen, fourteen and fifteen of

subdivision one of this section and a declaration as to all of the

general partners which shall comply with the requirements of

subparagraph (d) of paragraph one of this subdivision.

2-a. A redevelopment company may be created as a limited liability

company by the members signing, acknowledging and filing as hereinafter

provided a certificate which shall contain:

(1) The matters set out in paragraphs one, two, five, six, ten,

twelve, thirteen, fourteen and fifteen of subdivision one of this

section.

(2) The names and post-office addresses of the members.

(3) A statement of the capital of the limited liability company.

(4) As to all the members who are individuals, a declaration that (a)

all such members are of full age; (b) all of them if there be no more

than two and at least two-thirds of them if there be more than two are

citizens of the United States; and (c) at least one of them is a

resident of the state of New York; and as to all members which are

corporations, a declaration that each such corporation is either

incorporated under the laws of the state of New York or is a foreign

corporation duly authorized to do business in the state of New York.

3. A redevelopment company may be created as a trust by the settlor

signing, acknowledging and filing as hereinafter provided a certificate

which shall contain:

(1) The matters set out in paragraphs one, two, five, six, ten,

twelve, thirteen, fourteen and fifteen of subdivision one of this

section.

(2) A statement of the capital of the trust.

(3) The name and post-office address of the trustee or trustees.

(4) The name and post-office address of any person having a beneficial

interest, whether vested or contingent, under the trust.

(5) As to all the trustees who are individuals, a declaration that (i)

all such trustees are of full age; (ii) that all of them if there be no

more than two and at least two-thirds of them if there be more than two

are citizens of the United States; and (iii) that at least one of them

is a resident of the state of New York; and as to all trustees which are

corporations, a declaration that each such corporation is either

incorporated under the laws of the state of New York or is a foreign

corporation duly authorized to do business in the state of New York.

4. A certificate made pursuant to this section shall further contain a

declaration that after providing for all expenses, taxes and

assessments, there shall be paid annually out of the earnings of the

redevelopment company, a sum for interest on and amortization of any

mortgage indebtedness and depreciation charges if, when and to the

extent deemed necessary by the supervising agency, plus interest not

exceeding six per centum on outstanding income debentures and a

distribution to the shareholders, to the partners or to the

beneficiaries of the trust having interests vested in possession, as the

case may be, not exceeding six per centum of the total of the capital;

that the obligation in respect of such payments shall be cumulative, and

any deficiency in interest, amortization, depreciation and distribution

in any year shall be paid either from any cash surplus derived from

earnings remaining in the treasury of the redevelopment company in

excess of the amount necessary to provide such cumulative annual sums or

from the first available earnings in subsequent years; and that any cash

surplus derived from earnings remaining in the treasury of the

redevelopment company in excess of the amount necessary to provide such

cumulative annual sums shall upon the dissolution of, or in the case of

a redevelopment company which is a trust the termination of, the company

be paid into the general fund of the municipality.

5. A certificate made pursuant to the provisions of this section may

provide that in the event that income debenture certificates are issued

by the redevelopment company, the owners thereof may be given the same

right to vote as they would have if possessed of shares of equivalent

par value in the case of a corporation or if they had contributed

capital in the case of a partnership, or had a beneficial interest under

the trust vested in the case of a trust, of an amount equal to the

amount of the income debenture certificates held by them.

If provision is made for the issue of income debenture certificates,

interest shall be paid by the redevelopment company on income debenture

certificates only out of net earnings of the redevelopment company that

would be applicable to payment of distributions if there were no income

debentures.

§ 104 — Consent of supervising agency to creation of redevelopment companies

Consent of supervising agency to creation of redevelopment

companies. A certificate or a copy of a certificate made pursuant to

section one hundred three of this article shall be presented for filing

to the secretary of state in the case of a corporation or limited

liability company and to the supervising agency in the case of a

partnership or trust. No certificate or any amendment thereto shall be

filed without the prior written consent of the supervising agency. Such

consent of the supervising agency shall not be given in the case of a

partnership (general or limited), a limited liability company or a trust

unless there has been filed with the supervising agency a partnership

agreement, operating agreement or trust agreement, as the case may be,

the terms and conditions of which shall be subject to the approval of

the supervising agency.

§ 105 — Application of other corporation laws

Application of other corporation laws. The provisions of the

business corporation law as presently in effect and as hereafter from

time to time amended, shall apply to redevelopment companies which are

corporations, except where such provisions are in conflict with the

provisions of this article. In the event that any action with respect to

which the holders of income debentures shall have the right to vote is

proposed to be taken with regard to a redevelopment company which is a

corporation, then notice of any meeting at which such action is proposed

to be taken shall be given to such holders in the same manner and to the

same extent as if they were shareholders entitled to notice of and to

vote at such meeting, and any certificate filed pursuant to law in the

department of state with respect to any such action, whether taken with

or without meeting, and any affidavit required by law to be annexed to

such certificate, shall contain the same statements or recitals and such

certificate shall be subscribed and acknowledged, and such affidavit

shall be made, in the same manner as if such holders were shareholders

holding shares of an additional class of shares entitled to vote on such

action, or with respect to the proceedings provided for in such

certificate.

§ 105-a — Application of other laws

Application of other laws. The provisions of the limited

liability company law as presently in effect and as hereafter from time

to time amended, shall apply to redevelopment companies which are

limited liability companies, except where such provisions are in

conflict with the provisions of this article.

§ 106 — Powers of redevelopment companies

Powers of redevelopment companies. Each redevelopment company

shall have and may exercise such of the powers conferred by law as shall

be necessary in conducting the business of a redevelopment company and

consistent with the provisions of this article.

§ 107 — Limited return on investment

Limited return on investment. Subject to the provisions of

section one hundred twenty-three of this article, there shall be paid

annually out of the earnings of the redevelopment company, after

providing for all expenses, taxes and assessments, a sum for interest on

and amortization of any mortgage indebtedness and depreciation charges

if, when and to the extent deemed necessary by the supervising agency,

plus a distribution of six per centum on the capital and interest not

exceeding six per centum on outstanding income debentures; except that

in the case of redevelopment companies formed prior to April

twenty-ninth nineteen hundred sixty, and subject to the provisions of

section one hundred twenty-three of this article, there shall be paid

annually out of the earnings of the redevelopment company, after

providing for all expenses, taxes and assessments a sum for interest

amortization, depreciation and distributions, equal to but not exceeding

six per centum of the total actual final cost of the project as defined

by subdivision two of section one hundred twelve of this article; the

obligation in respect of such payments shall be cumulative, and any

deficiency in interest, amortization, depreciation and distributions in

any year shall be paid either from any cash surplus derived from

earnings remaining in the treasury of the redevelopment company in

excess of the amount necessary to provide such cumulative annual sums or

from the first available earnings in subsequent years; and any cash

surplus derived from earnings remaining in the treasury of the

redevelopment company in excess of the amount necessary to provide such

cumulative annual sums shall, upon the dissolution of, or in the case of

a redevelopment company which is a trust the termination of the company,

be paid into the general fund of the municipality except as otherwise

contemplated by subdivision five of section one hundred twenty-three of

this article.

§ 108 — Consideration for capital and bonds

Consideration for capital and bonds. No redevelopment company

which is a corporation shall issue shares, nor shall a redevelopment

company which is a partnership credit sums to the partners on capital

account, nor shall a redevelopment company which is a limited liability

company credit sums to the members on capital account, nor shall a

redevelopment company which is a trust subject amounts to the trust, and

no redevelopment company shall issue bonds or income debenture

certificates except for money or property actually received for the use

and lawful purposes of the redevelopment company, provided, however,

that a mutual redevelopment company may issue shares for home owners

purchase notes if the purchase transaction has received the written

endorsement of the commissioner in accordance with supplementary rules

and regulations of the commissioner made therefor and if at least two

hundred dollars in money or property is received by such mutual

redevelopment company toward the issuance of such shares. The

consideration for all capital, bonds or income debenture certificates

based upon property received shall equal a valuation approved by the

supervising agency and such a valuation shall be used in computing

actual or estimated cost.

§ 109 — Minimum amount of capital and debentures

Minimum amount of capital and debentures. Except as provided in

this section the capital of a redevelopment company together with any

income debentures shall in no event be less than the total of ten per

centum of the actual cost of any project or projects undertaken pursuant

to this article. The supervising agency may permit capital to be

increased or income debenture certificates to be issued for working

capital to be used in connection with such project to an amount not

exceeding three per centum of the estimated cost, or three per centum of

the total actual final cost, if that should exceed the estimated cost of

a project.

The provisions of this section shall not be applicable to any

redevelopment company if funds made available by the federal government

or any instrumentality thereof, or any mortgage or mortgage bonds

insured by the federal housing administrator or any other

instrumentality of the federal government are used in financing the

project in whole or in part.

§ 110 — Income debentures

Income debentures. With the approval of the supervising agency,

the certificate creating a redevelopment company, or an amended

certificate, may authorize the issuance of income debenture certificates

bearing no greater interest than six per centum per annum. Such income

debenture certificates and any instrument under which they are issued

may contain such other provisions, including provision for amortization

by serial maturities, through the operation of a sinking fund or

otherwise, as may be approved by the supervising agency.

§ 111 — Mortgages and mortgage bonds

Mortgages and mortgage bonds. Any redevelopment company,

subject to the approval of the supervising agency, may borrow funds and

secure the repayment thereof by bond and mortgage or by an issue of

bonds under a trust indenture. Each mortgage or issue of bonds of a

redevelopment company shall relate only to a single specified project

and to no other and such bonds shall be secured by mortgage upon all of

the real property of which such project consists.

First lien bonds of such redevelopment company when secured by a

mortgage not exceeding ninety per centum of the estimated cost prior to

the completion of the project, and in no event exceeding ninety per

centum of the actual cost upon such completion, as certified by the

supervising agency, or, in the case of a completed project, not

exceeding ninety per centum of the appraised value or such previously

certified actual cost, whichever is less, are hereby declared securities

in which all public officers and bodies of the state and of its

municipal subdivisions, all insurance companies and associations, all

savings banks and savings institutions, including savings and loan

associations, executors, administrators, guardians, trustees and all

other fiduciaries in the state may properly and legally invest the funds

within their control.

First lien bonds of such a redevelopment company issued under a trust

indenture and pursuant to a building loan contract, or a building loan

bond and building loan mortgage under which advances are made pursuant

to a building loan contract, where the aggregate principal amount to be

issued or advanced does not exceed ninety per centum of the estimated

cost prior to the completion of the project, and in any event does not

exceed ninety per centum of the actual cost upon such completion, as

certified by the supervising agency, are hereby declared securities in

which all banks, savings banks, savings institutions and trust companies

in addition to all such officers, bodies, companies, associations,

institutions and fiduciaries may properly and legally invest the funds

within their control; provided, however, that such investment is made as

a construction loan with a maturity of not to exceed two years. The

maturity of any such construction loan may be extended from time to time

with the approval of the board of directors or trustees of the bank,

savings banks, savings institutions or trust company holding such loan

but no one such extension shall be for a period of time exceeding six

months.

The bonds so issued and secured and the mortgage or trust indenture

relating thereto, may create a first or senior lien and a secondary or

junior liens upon the real property embraced in any project; provided,

however, that the total mortgage liens shall not exceed ninety per

centum of the estimated cost prior to the completion of the project, and

shall not in any event exceed ninety per centum of the actual cost upon

such completion, or, in the case of a completed project, not exceeding

ninety per centum of the appraised value or such previously certified

actual cost, whichever is less. Such bonds and mortgages or trust

indentures may contain such other clauses and provisions as shall be

approved by the supervising agency, including the right to assignment of

rents and entry into possession in case of default and including in the

case of a redevelopment company which is a partnership or trust the

right of the partners or trustees, as the case may be, to be free of any

personal liability thereunder; but the operation of the housing project

in the event of such entry by mortgagee or receiver shall be subject to

regulations promulgated by the supervising agency. Provisions for the

amortization of the bonded indebtedness of companies formed under this

article shall be subject to the approval of the supervising agency. So

long as funds made available by the federal government or any

instrumentality thereof or any mortgage or mortgage bonds, insured by

the federal housing administrator or any other instrumentality of the

federal government are used in financing, in whole or in part, any

project under this article, the capital structure of a redevelopment

company undertaking such project and the proportionate amount of the

cost of the lands and improvements to be represented by mortgages or

bonds shall be entirely in the discretion of the supervising agency; and

all restrictions as to the maturity of any construction loan and as to

the amounts to be represented by mortgages, mortgage bonds, income

debentures or capital shall be inapplicable to such projects or to

redevelopment companies undertaking such projects, except that the

bonds, mortgages, debentures and capital covering any project shall not

exceed the total actual final cost of such project as defined in

subdivision two of section one hundred twelve of this article.

Interest rates on mortgage indebtedness shall not exceed the greater

of

(a) six percentum per annum,

(b) the rate prescribed by the superintendent of financial services

pursuant to section fourteen-a of the banking law,

(c) the rates of mortgages or mortgage bonds insured by the federal

housing administration or any other instrumentality of the federal

government and

(d) such rate as may be approved by the supervising agency provided,

however, that the applicable rate for purposes of paragraphs (b), (c)

and (d), of this section one hundred eleven shall be the rate applicable

or approved at the time the redevelopment company incurs the mortgage

indebtedness.

As used in this section the term "bond" includes a note heretofore or

hereafter made.

§ 111-a — Participation by certain corporations and individuals

Participation by certain corporations and individuals. Any

bank, savings bank, savings institution, savings and loan association,

trust company, insurance company or association, or fiduciary authorized

to invest in mortgages and mortgage bonds of a redevelopment company, or

any combination of the foregoing, shall have power to participate and

invest, singly or jointly, with the New York city housing development

corporation in a bond or note and single participating mortgage, or in

separate bonds or notes and mortgages pursuant to this article. In the

event of such participation, the interest of each shall have equal

priority as to lien in proportion to the amount of loan so secured, but

need not be equal as to interest rate, time or rate of amortization or

otherwise.

§ 111-b — Mortgage modification provisions for redevelopment companies in cities with a population of one million or more

Mortgage modification provisions for redevelopment companies

in cities with a population of one million or more. 1. For purposes of

this section, "restrictive agreement" shall mean a binding and

irrevocable agreement between the redevelopment company and the

supervising agency providing that such redevelopment company for a term

of five years from the date of such agreement (i) shall not voluntarily

dissolve or reconstitute pursuant to section one hundred twenty-three of

this article, (ii) shall exercise any and all available options to renew

any housing assistance payments contract pursuant to section eight of

the United States Housing Act of nineteen hundred thirty-seven, as

amended, and any successor rent subsidy program, (iii) shall not cause

such a contract to be terminated by reason of such redevelopment

company's noncompliance with any of the terms thereof, and (iv) shall

not voluntarily cause or permit such a contract to expire, to not be

extended, to not be renewed, or to be terminated.

2. Notwithstanding the provisions of this article or the provisions of

any law, general or special, in cities with a population of one million

or more, a redevelopment company with a federally-aided mortgage formed

pursuant to this article may borrow funds and secure the repayment

thereof by note and mortgage or any other manner approved by the

supervising agency, provided, however, that (a) such approval by the

supervising agency shall be conditioned upon a restrictive agreement,

and (b) such redevelopment company may not increase the rents paid by

the tenants to pay for any such increase in indebtedness that is not

attributable to project cost.

§ 112 — Limitations

Limitations. In addition to limitations prescribed by this

article a redevelopment company shall not have power to:

1. Acquire any real property or interest therein for a project or

projects unless the supervising agency and the local legislative body

determine as provided in this article that such acquisition is necessary

or convenient for the public purpose defined in this article, and unless

any deed, lease or other instrument by which such real property or

interest therein is acquired contains a statement that the conveyance is

to a redevelopment company organized pursuant to article five of the

private housing finance law.

2. Create its capital, or issue its debentures and and bonds covering

any project undertaken by it in an amount greater in the aggregate than

the total actual final cost of such project. The actual cost of such

project shall include the cost of the lands and improvements

constituting the project and charges for financing and supervision

approved by the supervising agency, condemnation charges and interest

and other carrying charges during the period of acquisition and of

construction. The total actual final cost shall be deemed to be an

amount equal to such actual cost plus an allowance for working capital.

Such allowance for working capital shall not exceed an amount equal to

three per centum of the estimated cost or of the total actual final cost

of the project if that shall be greater than the estimated cost.

3. Enter into contracts for the payment of salaries to officers or

employees, or for the construction or for the substantial repair,

improvement or operation of projects except subject to the approval of

the supervising agency.

§ 112-a — Redevelopment loans

Redevelopment loans. Notwithstanding any provision of section

one hundred eleven or one hundred twelve of this article to the

contrary, where a redevelopment company undergoes a comprehensive

redevelopment plan, the supervising agency may approve a loan and

encumbrance of such project in an amount in excess of actual cost of the

project, provided that such amount represents cost of capital

improvements, redevelopment, or acquisition by a new owner, any

consequent rent increase is not unduly burdensome to the tenants, and

the redevelopment company enters into an agreement to remain subject to

the provisions of this article for a period of no less than fifteen

years from issuance of the loan and encumbrance.

§ 113 — Use of projects

Use of projects. The project or projects of any redevelopment

company shall be designed and used primarily for housing purposes, but

portions of the project may be planned and used for business,

commercial, cultural or recreational purposes appurtenant thereto as

approved in the project.

§ 114 — Procedure for submission and approval of plan or project

Procedure for submission and approval of plan or project.

Every plan or plan of a project proposed by a redevelopment company

shall contain a general description of the area to be redeveloped and a

statement of the plan of redevelopment with such detail of information

with reference thereto as may be necessary to a general understanding

thereof. Where changes in the city map and zoning amendments or

variances are necessitated by such plan or project, such amendments,

variances and changes shall be submitted together with the plan or

project herein and considered as part thereof.

After preliminary approval thereof by the supervising agency as to

conformity with the provisions and purposes of this article, every such

plan or plan of a project shall be submitted to the planning commission

for approval of the plan or plan of the project relating to:

1. Height and bulk of structures, density of population and percentage

of land coverage by structures as to their conformity with the purposes

of this article and with the master plan, if any; and the relationship

of the density of population contemplated by the plan or plan of the

project to the distribution of the population of the municipality in

other areas or parts thereof, and

2. Provision, if any, for business or commercial facilities

appurtenant to the plan or project, relationship to existing and planned

public facilities, adequacy and planned rearrangement of street

facilities and provisions for light, air, cultural and recreational

facilities as to their conformity with the purposes of this article and

their adequacy for accommodation of the density of population

contemplated by the plan or plan of the project.

Where a project consists substantially of the rehabilitation of an

existing structure or structures, and no changes in the city map and

zoning amendments or variances are necessitated by the project, the

supervising agency may waive the preparation and submission of the plan

or plan of a project.

Where a plan or plan of a project has been prepared and submitted, the

planning commission, after public hearing, notice of which shall be

published at least ten days prior thereto in the official publication of

the municipality, or if none exists, in a newspaper circulating in the

municipality, on the plan or plan of a project, may:

a. Issue an unqualified certificate of approval thereof, or

b. Issue a certificate of conditional or qualified approval thereof,

with or without recommendations, or

c. Disapprove thereof.

After action thereon by the planning commission, such plan or plan of

a project with a proposed form of contract between the municipality and

the redevelopment company or, when all stock, debentures and mortgage

bonds of the company are owned or are to be owned by one or more

insurance companies, between the municipality, redevelopment company and

such insurance company or companies shall be submitted by the

redevelopment company, with a certificate of approval of the supervising

agency and the certificate or a statement of action, if any, on the plan

or project by the planning commission, to the local legislative body for

its approval of the project as to conformity with the provisions and

purposes of this article, the extent of the tax exemption to be granted

pursuant to section one hundred twenty-five, the amount and nature of

the property to be condemned for the redevelopment company by the

municipality and the terms and conditions of payment therefor by the

redevelopment company, the amount of publicly owned land or facilities

to be sold to the redevelopment company or exchanged for redevelopment

company-owned lands and the availability of other suitable dwelling

accommodations for families living in the area or part thereof to be

affected by the plan or plan of the project.

As part of an approved project the local legislative body may require

a redevelopment company to dedicate to the municipality or any agency

thereof in the manner provided by law specified portions of the land in

a project for parks, streets, public recreational and other public

purposes.

The contract shall regulate the rents to be charged for rooms in the

project and may contain such other provisions, not inconsistent with

this article, as may be deemed necessary or desirable for the financing,

construction, operation and supervision of the project.

In any case where a plan or plan of a project has been prepared and

submitted and the planning commission shall have issued a certificate of

unqualified approval, or where preparation and submission of a plan or

plan of a project has been waived by the supervising agency in

accordance with the provisions of this section, approval of the project

by the local legislative body may be by resolution adopted by a majority

of the whole number of votes authorized to be cast by all of the members

thereof. In any case where a plan or plan of a project has been prepared

and submitted and the planning commission shall not have issued a

certificate of unqualified approval, the plan or plan of a project may

nevertheless be approved by the local legislative body, after public

hearings thereon, by resolution adopted by a three-fourths vote of the

whole number of votes authorized to be cast by all of the members

thereof. Notwithstanding any other provision of law, changes in the city

map, zoning amendments, or variances contained in the plan shall be

deemed approved by the local legislative body when it approves the plan

or project. Any such changes in the city map, zoning amendments, or

variances shall become effective on the date on which the supervising

agency shall file a resolution with the local legislative body in

implementation thereof. The local legislative body is authorized to

enter into the necessary contract or contracts on behalf of the

municipality.

If the contract parties are a municipality, a redevelopment company

and one or more insurance companies which own or will own all of the

stock, debentures, bonds and mortgage indebtedness of such redevelopment

company, or if the project is undertaken by an insurance company, then

the certificate of the supervising agency approving such contract shall

terminate the functions of the supervising agency pursuant to this

article, and after the execution of such contract all references herein

to the approval or other action by the supervising agency shall be

inapplicable to the project provided for in such contract and to such

redevelopment company or the insurance company undertaking such project.

§ 115 — Limitation on changes

Limitation on changes. It shall be unlawful during the period

of tax exemption, granted pursuant to section one hundred twenty-five of

this article, for any redevelopment company or any successor in interest

to its title to a project or any part thereof to change or modify any

feature of a project for which approval of the planning commission is

required by this article, without the approval of such commission,

except by a three-quarters vote of the local legislative body.

§ 116 — Transfer of real property to redevelopment company

Transfer of real property to redevelopment company.

Notwithstanding any requirement of law to the contrary or the absence of

direct provision therefor in the instrument under which a fiduciary is

acting, every executor, administrator, trustee, guardian or other

person, holding trust funds or acting in a fiduciary capacity, unless

the instrument under which such fiduciary is acting expressly forbids,

the state, its subdivisions, municipalities, all other public bodies,

all public officers, persons, partnerships and corporations organized

under or subject to the provisions of the insurance law, the

superintendent of financial services as conservator, liquidator or

rehabilitator of any such person, partnership or corporation, owning or

holding any real property within an area, may grant, sell, lease or

otherwise transfer any such real property to a redevelopment company and

receive and hold any cash, stock, income debentures, bonds, mortgages,

or other securities or obligations, secured or unsecured, exchanged

therefor by such redevelopment company and may execute such instruments

and do such acts as may be deemed necessary or desirable by them or it

and by the redevelopment company in connection with a project or

projects. An insurance company which has undertaken a project through

direct ownership and/or lease may transfer to the project any real

property which it owns or holds within an area and the actual cost of

such property to the insurance company shall be included in the total

actual final cost of such project.

§ 117 — Rules and regulations

Rules and regulations. The planning commission and the

supervising agency, respectively, shall have power to make rules and

regulations to carry out their powers and duties pursuant to this

article and to effectuate the purposes thereof.

§ 118 — Fees

Fees. The supervising agency, the local legislative body and

the planning commission, if any, may each adopt a reasonable schedule of

fees to be paid by redevelopment companies upon the filing with said

supervising agency, local legislative body or planning commission of a

plan, plans for a project or projects, amendments thereto and other

instruments in connection therewith and redevelopment companies shall

pay reasonable fees to the said supervising agency as said agency shall

prescribe for processing a redevelopment plan and for the supervision of

construction and for the audit, regulation and general supervision of

the management of the company, which fees shall be set aside in a

separate account and shall be used to pay for the expenses of

administering and carrying out the provisions of the redevelopment

companies law.

§ 119 — Acquisition

Acquisition. A municipality may take property by acquisition

pursuant to the provisions of the eminent domain procedure law for a

redevelopment company, provided the contract or contracts executed

pursuant to section one hundred fourteen contain a requirement that the

company shall pay to the municipality all sums expended or required to

be expended by the municipality in the acquisition of such real

property, provision as to the time of payment and manner of securing

payment thereof, and provisions requiring that the municipality receive,

before proceeding with the acquisition of such real property, such

assurances as to payment or reimbursement by the redevelopment company,

or otherwise, as the local legislative body may deem advisable. Upon the

execution of such contract or contracts the company shall cause to be

made two copies of surveys or maps of the real property described in the

contract, one of which shall be filed in the office of the redevelopment

company, one in the office of the corporation counsel or chief law

officer of the municipality, and one in the office in which instruments

affecting real property in the county are recorded. Upon compliance by

the redevelopment company with the applicable terms and conditions of

such contract or contracts the municipality shall proceed to acquire

title to the real property in accordance with the provisions of the

eminent domain procedure law and when title to the real property shall

have vested in the municipality, it shall convey the same to the

redevelopment company upon final compliance by the redevelopment company

with such terms and conditions. As soon as title shall have vested in

the municipality, the redevelopment company may, upon the authorization

of the mayor, enter upon the real property taken, take over and dispose

of existing improvements, and carry out the terms of the project with

respect thereto.

Real property in an area, needed or convenient for the project, which

is to be acquired pursuant to this section, may be acquired by the

municipality for the project, including any property devoted to a public

use, whether or not held in trust, notwithstanding that such property

may have been previously acquired or is owned by a public utility

corporation, it being hereby expressly determined that the public use in

conformity with the provisions of this article shall be deemed a

superior public use. The local legislative body may consent to the

acquisition of property owned by the municipality, whether or not such

property be held in trust, or may sell or lease any such property

necessary or convenient for a project of a redevelopment company without

public bidding, provided notice of such sale or lease is published and a

public hearing is held before the local legislative body. The term of

any such lease shall not be limited by any provision of any general,

special or local law or city charter limiting the period of time during

which a lease or any renewal thereof may run. Real property belonging to

a public utility corporation may not be acquired without the approval of

the commission or other officer or tribunal having regulatory power over

such corporation.

An award of compensation shall not be increased by reason of any

increase in the value of the real property caused by the assembly,

clearance or reconstruction, or proposed assembly, clearance or

reconstruction for the purposes of this article of the real property in

an area.

A local legislative body, upon payment therefor or upon exchange for

other lands, may convey to any redevelopment company land in any street

or public place which is duly closed or discontinued pursuant to the

plan of a project.

Notwithstanding the provisions of any general, special or local law,

charter or ordinance, the local legislative body of a city having a

population of one million or more may, upon the request of or with the

approval of the board of education of such city's school district,

grant, sell, lease or otherwise transfer any lands or rights or

interests therein or thereto, including fee interests, easements, space

rights or air rights or other rights or interests owned by such city and

occupied or reserved for school purposes and needed therefor, to a

redevelopment company where necessary for the joint development of a

project and a school or appurtenant facilities without public bidding,

provided notice of such lease or contract for the sale or other transfer

of such lands or rights or interests therein or thereto is published and

a public hearing is held before such local legislative body. No such

sale, lease or transfer of lands or rights therein or thereto is

authorized where the development of a project contemplates the erection

of housing facilities over an existing school or playground. The terms

of any such lease shall not be limited by any provision of any general,

special or local law or charter applicable to such city limiting the

period of time during which a lease or any renewal thereof may run.

Nothing in this section shall be deemed to forbid or prevent the

acquisition of any real or personal property by a redevelopment company

by gift, devise, bequest, grant, or subject to the provisions of this

article, by purchase at public or private sale.

§ 120 — Regulation of redevelopment companies

Regulation of redevelopment companies. The supervising agency

shall:

Examine each redevelopment company and keep informed as to its general

condition, its capitalization and the manner in which its property is

constructed, leased, operated or managed with respect to its compliance

with all provisions of law and orders of the supervising agency.

The supervising agency may:

1. Either itself or through its inspectors or employees duly

authorized by it, enter in or upon and inspect the property, equipment,

buildings, plants, offices, apparatus and devices of any redevelopment

company; examine all books, contracts, records, documents and papers of

any redevelopment company and by subpoena duces tecum compel the

production thereof.

2. In its discretion, prescribe uniform methods and forms of keeping

accounts, records and books to be observed by redevelopment companies,

and after a hearing to prescribe by order accounts in which particular

outlays and receipts shall be entered, charged or credited.

3. Require specific answers to questions upon which it may desire

information and require the filing of periodic reports in the form,

covering the period, and at the time prescribed by it.

4. In the event of a violation by a company of any provision of its

certificate or of law or any rules and regulations promulgated pursuant

to the provisions of this article, the supervising agency may, by

written notice to all of the directors, partners, members or trustees,

as the case may be, of a company, at their last known address,

specifying the reasons therefor, advise such directors, partners,

members or trustees, as the case may be, of its intention to remove any

or all of the existing directors or to appoint a manager or managers of

the limited liability company, partnership or trust who shall

exclusively exercise all of the powers of such partners, members or

trustees, as the case may be, for the duration of the appointment of

such manager or managers. A copy of any such notices shall be mailed to

the mortgagee of record. In the event that the company fails to comply

with the requirements of the supervising agency within thirty days from

date of mailing of said written notice, the supervising agency may, with

the written approval of the mortgagee and without further notice to the

company or to its directors, partners, members or trustees, as the case

may be, remove such directors in the case of a redevelopment company

which is a corporation or any of them from office and appoint such

person or persons as the supervising agency, in its sole discretion,

deems advisable, including officers or employees of the supervising

agency, as new directors to serve in the places of those removed, or

appoint such manager or managers in the case of a redevelopment company

which is a partnership, limited liability company or trust, who shall

exclusively exercise all of the powers of such partners, members or

trustees, as the case may be. Directors or managers so appointed need

not meet qualifications which may be prescribed by the certificate,

by-laws, partnership agreement, articles of organization or operating

agreement of the limited liability companies or trust agreement, or

other rules or regulations of the company. In the absence of fraud or

bad faith directors or managers so appointed shall not be personally

liable for debts, obligations or liabilities of the company. Directors

or managers so appointed shall serve only for a period coexistent with

the duration of such violation or until the supervising agency is

assured, in a manner satisfactory to it, against violations of a similar

nature. Officers or employees of the supervising agency who are

appointed as such directors or managers shall serve in such capacity

without compensation.

§ 120-a — State supervision and regulation

State supervision and regulation. A municipality with a

population of less than one million may, by action of its local

legislative body concurred in by the commissioner, provide for the

supervision and regulation of a project and the redevelopment company

carrying out such project by the commissioner in lieu of the supervising

agency. With respect to any such project and company, the commissioner

shall have, from and after the effective date of such action, all of the

powers and duties of a supervising agency pursuant to this article. The

company shall pay to the commissioner fees, as prescribed by the

commissioner, to cover the expenses of examination, audit, and

supervision of the company and the project.

§ 121 — Sinking fund

Sinking fund. Unless other provision be made therefor in the

contract with the municipality, the supervising agency, if it shall deem

it feasible at any time, subject to the limitation contained in section

one hundred seven of this article, may require a redevelopment company

to provide out of earnings, after provision for distributions and

interest, a sinking fund in an amount to be fixed by such supervising

agency for the gradual retirement of the capital and income debenture

certificates of such company. Such sinking fund may be used either for

the purchase or retirement, from time to time, of capital or income

debenture certificates at a price approved by the supervising agency not

exceeding par value thereof with accrued and unpaid distributions or

interest, or if it be not practicable to purchase or retire such capital

or such income debenture certificates at a price so approved, the moneys

in such sinking fund may be added to the surplus of such company. Any

capital evidenced by shares or income debenture certificates purchased

or retired out of such sinking fund shall be cancelled and shall not be

reissued.

§ 122 — Transfer of title or foreclosure of project

Transfer of title or foreclosure of project. 1. Until the

termination of the tax exemption, whether by expiration or by any other

cause, a redevelopment company, heretofore or hereafter organized, shall

not have power to sell the real property constituting the project or any

portion or portions thereof without the consent of the local legislative

body.

2. If an action be brought to foreclose a mortgage or tax lien upon a

redevelopment project, heretofore or hereafter authorized pursuant to

this article, and the real property constituting the project shall be

acquired at the foreclosure sale or from the mortgagee or lienor that

had acquired the property of such sale, or by a conveyance in lieu of

such sale, by a redevelopment company organized pursuant to this

article, or by the federal government or an instrumentality thereof, or

by a corporation which is, or by agreement has become subject to the

supervision of the superintendent of financial services, such successor

in interest shall acquire such project subject to all provisions of the

contract regulating such project and shall be entitled to all of the

benefits contained in such contract. In all other cases of sale at

foreclosure or forced sale, the real property constituting the project

or any portion or portions thereof shall be sold free of all

restrictions, except such covenants running with the land as may be

contained in the contract regulating the project, or in the deed, if

any, given by the municipality to the redevelopment company affecting

all or any portion of the real property upon which the project is

situated, and the tax exemption, if any, theretofore granted to such

project pursuant to such contract shall immediately terminate.

§ 123 — Dissolution

Dissolution. 1. After termination of any tax exemption granted

pursuant to section one hundred twenty-five of this article, whether by

expiration or by any other cause, or in the event that prior thereto the

redevelopment company elects to pay to the municipality the total of all

accrued taxes for which such exemption was granted and received,

together with interest at the rate of five per centum per annum, a

redevelopment company which is a corporation or partnership or limited

liability company may voluntarily dissolve or, in the case of a

redevelopment company which is a trust, may terminate, and title to the

project may be conveyed in fee to the owner or owners of its capital or

to any corporation, partnership, limited liability company or trust

designated by it or them for the purpose, or the redevelopment company

may be dissolved or terminated and reconstituted pursuant to appropriate

laws relating to the formation and conduct of corporations,

partnerships, limited liability companies or trusts, after providing, in

any case, for the payment of all current operating expenses, taxes,

indebtedness and all accrued interest thereon, and the par value or

amount of the capital of the redevelopment company and accrued

distributions in respect thereof. If, after making such provision and

after the conveyance of the project, a cash surplus remains in the

treasury of the redevelopment company, such cash surplus shall, upon

dissolution or termination, be paid into the general fund of the

municipality. After such dissolution or termination and conveyance or

such reconstitution, the provisions of this article shall become and be

inapplicable to any such project and its owner or owners, and any tax

exemption granted to such redevelopment company pursuant to section one

hundred twenty-five of this article shall cease and terminate.

2. If prior to the termination of any tax exemption the project is

sold for any reason, the redevelopment company shall dissolve or

terminate, and any tax exemption granted to such redevelopment company

pursuant to section one hundred twenty-five of this article shall cease

and terminate, except as otherwise provided in section one hundred

twenty-two of this article. In such case the shareholders, partners,

members or beneficiaries, as the case may be, and income debenture

certificate holders shall in no event receive more than the par value of

their shares or amount of their capital and the face value of their

income debenture certificates with accrued and unpaid distributions or

interest in respect of such capital and income debenture certificates,

and any remaining surplus shall be paid into the general fund of the

municipality.

3. In no event shall a redevelopment company be voluntarily dissolved

or terminated unless provision is made for the payment in full of the

remaining balance of principal and interest due or unpaid upon any

mortgage on its property or any part thereof, but any project may, with

the consent of the local legislative body of the municipality, be

conveyed and transferred to the municipality subject to such mortgage

and accrued interest.

4. Unless the local legislative body of the municipality shall consent

to the voluntary dissolution or termination of a redevelopment company,

such a company shall not dissolve or terminate except in accordance with

subdivisions one and two of this section or upon the expiration of its

term as stated in the certificate creating the redevelopment company.

5. With the consent of the local legislative body and the

superintendent of financial services, a redevelopment company heretofore

or hereafter organized may voluntarily dissolve or terminate prior to

the termination of any tax exemption granted pursuant to section one

hundred twenty-five of this article and title to the project may be

conveyed, and all other assets of such redevelopment company may be

transferred, to an insurance company, whether or not such project shall

have been theretofore completed. After such dissolution or termination

and conveyance such tax exemption shall continue for the period of years

originally provided for in the contract, or for the unexpired portion

thereof if such period shall have theretofore commenced, subject to

prior termination pursuant to section one hundred twenty-four or section

one hundred twenty-five of this article, and the provisions of this

article shall thereafter be applicable to such project and to such

insurance company to the same extent and with the same force and effect

as though such project had been initially undertaken by such insurance

company pursuant to section one hundred twenty-four of this article;

provided, however, that nothing herein contained shall be deemed to

require the resubmission of the plan of the project and the contract

relating thereto for approval pursuant to section one hundred fourteen

of this article.

6. The contract with the municipality may contain such other

provisions for the dissolution or termination of the redevelopment

company as may be deemed advisable, not inconsistent with the provisions

of this article. In case of a dissolution or termination and conveyance

in accordance with subdivision five of this section, the contract may be

modified consistently with the provisions of said subdivision five and

section one hundred twenty-four of this article, any such modifications

to be approved by the superintendent of financial services and the local

legislative body.

7. Upon dissolution or termination as provided in this section, this

article shall become and be inapplicable to the project and its owner or

owners except as otherwise contemplated by subdivision five of this

section.

§ 124 — Participation by certain corporations

Participation by certain corporations. One or more insurance

companies shall have the power to organize, or cause to be organized, a

redevelopment company formed pursuant to the provisions of this article,

and to purchase for cash or to receive and hold in exchange for

property, and to own and control, the stock or the income debenture

certificates or both of any redevelopment company and shall also have

power to invest, singly or jointly, in a bond and first mortgage or in

an issue of bonds secured by mortgage or trust indenture constituting a

first lien upon any project as provided in this article. An insurance

company, however, which owns stock or income debenture certificates of a

redevelopment company and also owns bonds or a bond and mortgage or an

interest in a bond and mortgage of the same redevelopment company shall

not, without the consent of the supervising agency, sell all or any part

of such bonds or such bond and mortgage or of its interest in such bond

and mortgage unless it shall simultaneously sell such stock and such

income debenture certificates owned by it.

Notwithstanding any other provision of law, an insurance company or

companies operating a redevelopment project or owning all of the stock

of a redevelopment company are hereby expressly authorized to enter into

contracts contemplated by this article and to agree by contract with the

municipality not to sell, assign, or otherwise transfer such project or

the stock, income debentures or mortgage bonds of such redevelopment

company during the period of tax exemption provided for by the contract

pursuant to this article without the consent of the local legislative

body of the municipality. An insurance company or companies owning all

of the stock of a redevelopment company are hereby expressly authorized

to make such capital contributions to any such redevelopment company, in

cash or by cancellation of securities or otherwise, as may be necessary

to enable such redevelopment company to comply with all conditions

precedent to its dissolution and conveyance of its property in

accordance with section one hundred twenty-three of this article, and

upon dissolution of such a redevelopment company, to acquire the

project, complete the same if not theretofore completed, and own and

operate the same as a permanent investment for such period as it or they

may deem desirable either directly or through acquisition and ownership

of the capital stock of any corporation which may acquire title to the

project pursuant to subdivision one of section one hundred twenty-three.

An insurance company, instead of investing its funds in the stock and

debentures or other obligations of a redevelopment company, may through

direct ownership and/or lease acquire, own, construct, manage or operate

as an investment for such period as it may deem desirable, one or more

projects, in which event the provisions of subsection one of section one

hundred twelve of this article applicable to redevelopment companies

shall be applicable to such insurance company in its operations with

respect to any such project but not otherwise. Said provisions and the

ensuing provision of this section shall cease to be applicable to any

such project and to such insurance company in its operations with

respect to such project after termination of any tax exemption granted

pursuant to section one hundred twenty-five of this article with respect

to such project, whether such termination shall be by expiration or by

any other cause, or in the event that prior thereto the insurance

company elects to pay the municipality the total of all accrued taxes

for which such exemption was granted and received, together with

interest at the rate of five per centum per annum. If any such project

shall be sold by an insurance company, the tax exemption with respect to

such project shall thereupon cease and terminate unless the local

legislative body shall otherwise provide.

Until the termination of any tax exemption granted pursuant to section

one hundred twenty-five of this article or until the provisions of this

article shall otherwise cease to be applicable:

1. An insurance company shall be entitled to earn and retain annually

on a cumulative basis in respect of each project operated by it

hereunder, before depreciation but after providing for all expenses,

taxes and assessments attributable to such project or to the income

therefrom, a sum equal to but not exceeding six per centum of the total

actual final cost of the project as defined by subdivision two of

section one hundred twelve of this article.

2. Separate accounts shall be kept for each project operated by an

insurance company.

3. If the income from any such project for any year, after all

expenses, taxes and assessments attributable thereto or to the income

therefrom, shall be in excess of six per centum of the total actual

final cost of such project as defined by subdivision two of section one

hundred twelve of this article, such excess shall be credited to a

special reserve account.

4. If the income from any such project for any year, after all

expenses, taxes and assessments attributable thereto or to the income

therefrom shall be less than six per centum of such total actual final

cost, such deficiency shall be charged against such special reserve

account.

The amount of any accrued taxes and interest thereon paid by an

insurance company pursuant to the second paragraph of section one

hundred twenty-five of this article may be charged against such special

reserve account. An amount equal to any balance remaining to the credit

of such special reserve account on the termination of the period of tax

exemption shall be paid into the general fund of the municipality. If

any project shall be conveyed to an insurance company in accordance with

subdivision five of section one hundred twenty-three of this article, an

amount equal to all accrued and unpaid interest, amortization and

dividends on the stock and evidences of indebtedness of the

redevelopment company theretofore accumulated in accordance with section

one hundred seven of this article shall be charged against the special

reserve account except to the extent included in total actual final

cost, and any remaining cash surplus derived from earnings remaining in

the treasury of the redevelopment company shall be transferred to such

insurance company and shall be credited by it to the special reserve

account provided for in this section applicable to such project.

Except as specifically provided herein this article shall not be

deemed to limit or restrict any power or authority granted to insurance

companies or to any other corporation or to any fiduciary by any other

provision of law heretofore or hereafter enacted.

§ 125 — Tax exemptions

Tax exemptions. 1. (a) The local legislative body of any

municipality in which a project of such company is or is to be located

may by contract agree with any redevelopment company to exempt from

local and municipal taxes, other than assessments for local

improvements, all or part of the value of the property included in such

project which represents an increase over the assessed valuation of the

real property, both land and improvements, acquired for the project at

the time of its acquisition by the redevelopment company which

originally undertook the project and for such definite period of years

as such contract may provide, except that where the real property in a

project was acquired for purposes of rehabilitation, the local

legislative body either may utilize the foregoing formula or may agree

to exempt from such taxes all or part of the value of the property

included in such project on condition that the amount of such taxes to

be paid shall not be less than ten per centum of the annual shelter rent

or carrying charges of such rehabilitation project. The tax exemption

shall not operate for a period of more than twenty-five years,

commencing in each instance from the date on which the benefits of such

exemption first become available and effective; provided, however, that

with respect to a project either acquired by a mutual redevelopment

company pursuant to section one hundred twenty-six or owned and

continuing to be owned by a mutual redevelopment company which would

require substantial increases in carrying charges after the period of

tax exemption is ended unless relief is provided, the local legislative

body may contract with such mutual redevelopment company to extend such

tax exemption for not more than twenty-five additional years at a rate

of tax exemption not to exceed an average of fifty per centum during

such additional period, provided that the tax exemption during the first

two years of such additional period shall continue at the rate of the

tax exemption of such project immediately preceding the termination of

the initial twenty-five year period and that the tax exemption

thereafter shall be decreased in equal biennial decrements, the first of

which shall occur immediately following such two year period, and

provided that such contract shall contain provisions as to income

limitations relating to admission and continued occupancy of the project

and provisions as to rental surcharges to the same effect as are

contained in subdivisions two, three, four and five of section

thirty-one, except that in the case of projects owned and continuing to

be owned by mutual redevelopment companies, persons or families whose

probable aggregate annual income does not exceed the median income for

families of the same size in the same metropolitan area shall also be

eligible for admission to the project on the understanding that any

person or family becoming eligible by reason hereof whose probable

aggregate annual income at the time of admission or during the period of

occupancy exceeds, the greater of (i) the median income for such persons

or families for the metropolitan statistical area in which the project

is located, or if a project is located outside a metropolitan

statistical area, the median income for such persons or families for the

county in which the project is located, as most recently determined by

the United States department of housing and urban development, in which

case any person or family becoming eligible for admission pursuant to

this subparagraph shall pay, from the time of admission, a rental

surcharge as provided for in subdivision three of section thirty-one of

this chapter, computed on the basis of the income limitations applicable

to such persons or families in the absence of this subparagraph, or (ii)

six times the rental shall be liable for payment of rental surcharges

hereunder computed on the basis of such ratio, except that in the case

of families with three or more dependents such ratio shall be seven to

one; and provided further that with respect to a project which is or is

to be permanently financed by a federally-aided mortgage, the tax

exemption shall operate for so long as such mortgage is outstanding, but

in no event for a period of more than forty years, commencing in each

instance from the date on which the benefits of such exemption first

become available and effective; and provided further that with respect

to a project which is or is to be permanently financed by a loan from

the New York city housing development corporation, the tax exemption

shall operate for so long as such loan is outstanding.

(a-1) Where the redevelopment contract between a mutual redevelopment

company and the local legislative body under which the initial tax

exemption was granted contains provisions different from those in

subdivisions two, three, four and five of section thirty-one of this

chapter, then a contract to extend the tax exemption for an additional

period under paragraph (a) of this subdivision may provide that those

provisions of the redevelopment contract shall continue to apply (with

such modifications as the supervising agency of such mutual

redevelopment company shall approve) during the additional period as if

such additional period were the initial period of tax exemption for such

mutual redevelopment company, notwithstanding the provisions of

paragraph (a) of this subdivision to the contrary.

(a-2) Any inconsistent provision of law notwithstanding, in a city

having a population of one million or more, where a local legislative

body has acted to extend the tax exemption of a mutual redevelopment

company for an additional twenty-five years after the initial tax

exemption period has expired, the local legislative body may authorize

tax exemption during the final eleven years of such additional

twenty-five year exemption period under this subdivision, provided that

the amount of taxes to be paid by the mutual redevelopment company

during the final eleven years of such additional twenty-five year

exemption period shall not be less than an amount equal to the greater

of (i) ten per centum of the annual rent or carrying charges of the

project minus utilities for the residential portion of the project, or

(ii) the taxes payable by such company for the residential portion of

the project in the fourteenth year of such additional twenty-five year

exemption period, and may further extend the period of such additional

twenty-five year exemption for up to a total period of thirty-five years

from the date of expiration of the initial tax exemption, provided that

the amount of taxes to be paid by the mutual redevelopment company

during any such extension beyond such additional twenty-five year

exemption period shall not be less than an amount equal to the greater

of (i) ten per centum of the annual rent or carrying charges of the

project minus utilities for the residential portion of the project, or

(ii) the taxes payable by such company for the residential portion of

the project in the fourteenth year of such additional twenty-five year

exemption period.

(a-3) Any inconsistent provision of law notwithstanding, the local

legislative body of any municipality may grant an additional tax

exemption period for any project, other than a project by a mutual

redevelopment company, that received a tax exemption under paragraph (a)

of this subdivision, upon the expiration of the tax exemption period.

The additional tax exemption period may be for a term of forty years, or

until such time as the project is no longer operated under the

restrictions and for the purposes set forth in this article, whichever

is sooner. Unless otherwise approved by the local legislative body, the

amount of taxes paid by the redevelopment company during such additional

tax exemption period shall not be less than (i) the taxes payable by

such company in accordance with the resolution for such redevelopment

company that was approved by the local legislative body and that was in

effect immediately prior to the expiration of the initial tax exemption

period, or (ii) if there is no such resolution, the taxes payable by

such company in accordance with the exemption authorized pursuant to

this article immediately prior to the expiration of the initial tax

exemption period.

(a-4) Any inconsistent provision of law notwithstanding, in a city

having a population of one million or more, where a local legislative

body has acted to extend the tax exemption of a mutual redevelopment

company for the maximum period provided for in paragraph (a-2) of this

subdivision, the local legislative body may grant an additional tax

exemption for a period of up to fifty years, provided that the amount of

taxes to be paid during any such period of tax exemption shall be not

less than an amount equal to the lesser of (i) five per centum of the

annual rent or carrying charges of the project minus utilities for the

residential portion of the project, or (ii) the taxes payable by such

company for the residential portion of the project during the tax year

commencing July first, two thousand and ending on June thirtieth, two

thousand one. Such grant of an additional tax exemption period shall

take effect upon the expiration of the maximum period provided for in

paragraph (a-2) of this subdivision.

(a-5) Any inconsistent provision of law notwithstanding, including but

not limited to any limitation in paragraph (a) of this subdivision, the

local legislative body of any municipality within the County of Nassau,

with respect to a project either: (i) acquired by a mutual redevelopment

company pursuant to section one hundred twenty-six of this article; or

(ii) owned and continuing to be owned by a mutual redevelopment company

where there is a restriction that said housing must be occupied by

seniors with a minimum age of fifty-five as a condition to any

restrictive covenants of said mutual redevelopment company, which would

require substantial increases in carrying or maintenance charges after

the initial period of tax exemption is ended or is going to require

increases in the carrying or maintenance charges during any such

extended tax exemption pursuant to a present extension agreement due to

the reduction or elimination of the tax exemption provided to the

project immediately preceding the termination of the initial twenty-five

year period, unless relief is provided, may contract with such mutual

redevelopment company to: (i) extend such tax exemption for not more

than twenty-five additional years at the rate of the tax exemption of

such project immediately preceding the termination of the initial

twenty-five year period for all of the additional twenty-five year

period; or (ii) modify an existing extended tax exemption to provide for

such an extension.

(b) A redevelopment company which has been granted and has received

tax exemption pursuant to this section may at any time elect to pay to

the municipality or other appropriate taxing jurisdiction the total of

all accrued taxes for which exemption was granted and received, together

with interest at the rate of five per centum per annum. Upon such

payment the tax exemption of the project shall thereupon cease and

terminate.

(c) Where a municipality acts on behalf of another taxing jurisdiction

in assessing real property for the purpose of taxation, or in levying

taxes therefor, the said agreement by the local legislative body of such

municipality shall have the effect of exempting the real property in a

project from local and municipal taxes, other than assessments for local

improvements, levied by or in behalf of both such taxing jurisdictions.

(d) As used in this subdivision the term "taxing jurisdiction" means

any municipal corporation or district corporation, including any school

district or any special district, having the power to levy or collect

taxes and benefit assessments upon real property, or in whose behalf

such taxes or benefit assessments may be levied or collected.

2. Any inconsistent provision of law notwithstanding, mortgages of any

such company issued to the federal government or any instrumentality

thereof, or to any municipal housing authority or other public housing

agency or instrumentality thereof whose obligations are determined to be

exempt from federal taxation by the federal government, or issued to a

financial institution and insured or guaranteed by the federal housing

administrator or any other instrumentality of the federal government

shall be exempt from the mortgage recording taxes imposed by article

eleven of the tax law.

§ 126 — Reduced rentals for the elderly

Reduced rentals for the elderly. (a) For the purpose of

enabling lower income elderly persons to continue in occupancy without

paying rentals in excess of a fair proportion of their income, any

municipality having a population of less than one million is authorized

to make and to contract to make periodic payments to a redevelopment

company in an amount not exceeding the difference between the rent or

carrying charges for the dwellings occupied by such lower income persons

and one-third of their net probable aggregate annual income, where such

rent or carrying charges exceed such one-third of income; provided that

the aggregate amount of periodic payments to be made in accordance with

contracts entered into by the municipality during any fiscal year

thereof pursuant to this section, subdivision nine of section

thirty-one, subdivision seven of section eighty-five-a, and section five

hundred seventy-seven-a of this chapter shall not exceed the aggregate

amount of all real property taxes paid or payable during such fiscal

year by all companies organized pursuant to this article, article II,

article IV, and article XI of this chapter and the aggregate estimated

receipts of all such companies in such fiscal year from rental

surcharges collected or to be collected pursuant to this chapter.

(b) Such payments shall be made only where the contract between the

municipality and the company pursuant to section one hundred fourteen

imposes income limitations on admission and on continued occupancy and

requires the payment of surcharges to the municipality by over-income

occupants.

(c) Such payments shall be made only on account of a person or family

in occupancy where the head of the household is sixty-two years of age

or older and is not a recipient of public assistance pursuant to the

social services law, and where the net probable aggregate annual income

of the person or family in occupancy does not exceed six thousand five

hundred dollars a year.

Notwithstanding the provisions of subdivision twenty-nine of section

two of this chapter, net probable aggregate annual income shall mean the

annual income of family members from all sources after deductions of

federal, state and city income taxes; provided that any municipality may

provide that increases in benefits under the social security act which

take effect after such person or family has assumed occupancy shall not

be taken into account.

(d) A company having a contract with the municipality pursuant to this

subdivision may not collect from persons or families in occupancy on

whose account such payments are made any rentals in excess of the

amounts specified in such contract.

§ 127 — Acquisition by mutual redevelopment companies

Acquisition by mutual redevelopment companies. Anything in this

article to the contrary notwithstanding:

(a) With the approval of the supervising agency, any person owning a

project may convey such project to a mutual redevelopment company and a

mutual redevelopment company may be organized to acquire an existing

project prior to expiration of an initial tax exemption granted pursuant

to section one hundred twenty-five, and may own, maintain, operate,

sell, and convey such project pursuant to this article. In part payment

of the purchase price therefor, such company may execute and deliver a

bond and mortgage or an issue of bonds under a trust indenture, the

aggregate principal amount of which does not exceed ninety per centum of

such purchase price, and which shall be secured by a first mortgage upon

all the real property of which such project consists. Such bonds are

hereby declared securities in which all public officers and bodies of

the state and of its municipal subdivisions, all insurance companies and

associations, all savings banks and savings institutions, including

savings and loan associations, executors, administrators, guardians,

trustees, and all other fiduciaries in the state may properly and

legally invest the funds within their control. The total capital created

and bonds or debentures issued by such mutual redevelopment company

shall not exceed the total cost of the purchase of the project and an

allowance for working capital not greater in amount than three per

centum of such cost.

(b) With the consent of the local legislative body, any initial tax

exemption granted pursuant to section one hundred twenty-five, shall

continue after conveyance of a project to a mutual redevelopment company

for the period of years originally provided for in the contract, or for

the unexpired portion thereof if such period shall have commenced,

subject to prior termination pursuant to section one hundred twenty-four

or section one hundred twenty-five, and this article shall continue to

be applicable to such project as though such project had been initially

undertaken by such mutual redevelopment company; provided, however, that

nothing herein shall require the resubmission of the plan of the project

and the contract relating thereto for approval pursuant to section one

hundred fourteen. The contract may, with the approval of the local

legislative body and of the holder of the mortgage on the project, be

modified in a manner consistent with this section.

§ 128 — Resale price of shares

Resale price of shares. Notwithstanding any other provision of

this article and subject to any regulation not inconsistent with this

section which may be promulgated by the supervising agency:

(a) The resale price of shares in a mutual company shall be fixed by

the mutual company, subject to the approval of the supervising agency,

and shall be equal to (1) the consideration the selling

tenant-cooperator paid for such shares and (2) any capital assessments

and voluntary capital contributions approved by the supervising agency

and paid by the selling tenant-cooperator to the mutual company, to the

extent not already included in the consideration paid for such shares,

and, if established by the mutual company, (3) a proportionate share of

the actual aggregate amortization paid on all existing and prior

mortgages on the project in reduction of total outstanding principal

indebtedness during such period as shall be fixed by the board of

directors of the mutual company, to the extent not already included in

the consideration paid for such shares, and (4) reasonable

administrative charges.

(b) The aggregate amount to be paid to the selling tenant-cooperator

with respect to the sale of the selling tenant-cooperator's shares shall

be fixed by the board of directors of the mutual company, subject to the

approval of the supervising agency, and shall be equal to (1) the

consideration the selling tenant-cooperator paid for such shares, (2)

any capital assessments and voluntary capital contributions approved by

the supervising agency and paid by the selling tenant-cooperator to the

mutual company, to the extent not already included in the consideration

paid for such shares, and (3) a proportionate share of the actual

aggregate amortization paid by the selling tenant-cooperator on all

existing and prior mortgages on the project in reduction of total

outstanding principal indebtedness during such period as shall be fixed

by the board of directors pursuant to subdivision (a) of this section,

to the extent not already included in the consideration paid for such

shares. To the extent that a selling tenant-cooperator may be entitled

to an amount less than the resale price of his shares, the difference

shall be retained by the mutual company.

(c) The board of directors may, subject to the approval of the

supervising agency, establish a general policy pursuant to which a

selling tenant-cooperator who had occupied more than one dwelling unit

is paid an amount measured by his proportionate share of the actual

aggregate amortization paid during his period of occupancy on all

existing or prior mortgages on the project. To the extent that a selling

tenant-cooperator may be entitled to an amount greater than the resale

price of shares, the difference may be paid to the selling

tenant-cooperator by the mutual company.

(d) The "proportionate share of the actual aggregate amortization paid

on all existing and prior mortgages on the project" referred to in

subdivision (a) of this section shall be in the same ratio to such

actual aggregate amortization as the number of shares held by the

selling tenant-cooperator at the time of sale bears to the total number

of shares of issued and outstanding capital stock of the mutual company

during such period.

(e) Nothing contained in this section shall prohibit the continued use

of any method of calculating resale price adopted by a mutual company

and approved by the supervising agency prior to the effective date of

this section.

ARTICLE 6 Urban Redevelopment Corporations

§ 200 — Short title

Short title. This article shall be known and may be cited and

referred to as the "Urban Redevelopment Corporations Law."

§ 201 — Legislative finding, policy of state, and purpose of article

Legislative finding, policy of state, and purpose of article.

It is hereby declared that in the cities of the state substandard and

insanitary areas exist which have resulted from inadequate planning,

excessive land coverage, lack of proper light, air and open space,

defective design and arrangement of buildings, lack of proper sanitary

facilities, and the existence of buildings, which, by reason of age,

obsolescence, inadequate or outmoded design, or physical deterioration

have become economic or social liabilities, or both; that such

conditions are prevalent in areas where substandard, insanitary, outworn

or outmoded industrial, commercial or residential buildings prevail;

that such conditions impair the economic value of large areas, infecting

them with economic blight, and that such areas are characterized by

depreciated values, impaired investments, and reduced capacity to pay

taxes; that such conditions are chiefly in areas which are so subdivided

into small parcels in divided ownerships and frequently with defective

titles, that their assembly for purposes of clearance, replanning,

rehabilitation and reconstruction is difficult and costly; that the

existence of such conditions and the failure to clear, replan,

rehabilitate or reconstruct these areas results in a loss of population

by the areas and further deterioration, accompanied by added costs to

the communities for creation of new public facilities and services

elsewhere; that it is difficult and uneconomic for individual owners

independently to undertake to remedy such conditions; that it is

desirable to encourage owners of property or holders of claims thereon

in such areas to join together and with outsiders in corporate groups

for the purpose of the clearance, replanning, rehabilitation and

reconstruction of such areas by joint action; that it is necessary to

create, with proper safeguards, inducements and opportunities for the

employment of private investment and equity capital in the clearance,

replanning, rehabilitation and reconstruction of such areas; that such

conditions require the employment of such capital on an investment

rather than a speculative basis, allowing however, the widest latitude

in the amortization of any indebtedness created thereby; that such

conditions further require the acquisition at fair prices of adequate

areas, the gradual clearance of such areas through demolition of

existing obsolete, inadequate, unsafe and insanitary buildings and the

redevelopment of such areas under proper supervision with appropriate

planning, land use and construction policies; that the clearance,

replanning, rehabilitation and reconstruction of such areas on a large

scale basis are necessary for the public welfare; that the clearance,

replanning, reconstruction and rehabilitation of such areas are public

uses and purposes for which private property may be acquired; that such

substandard and insanitary areas constitute a menace to the health,

safety, morals, welfare and reasonable comfort of the citizens of the

state; that such conditions require the creation of the agencies,

instrumentalities and corporations hereinafter described, which are

hereby declared to be agencies and instrumentalities of the state, for

the purpose of attaining the ends herein recited; that the protection

and promotion of the health, safety, morals, welfare and reasonable

comfort of the citizens of the state are matters of public concern; and

the necessity in the public interest for the provisions hereinafter

enacted is hereby declared as a matter of legislative determination.

§ 202 — Definitions

Definitions. The following terms, whenever used or referred to

in this article, shall, unless a different intent clearly appears from

the context, be construed as follows:

The term "development area" shall mean that portion of an area to

which a development plan is applicable.

The term "development cost" shall mean the amount determined by the

supervising agency to be the actual cost of the development, or of the

part thereof for which such determination is made, and shall include,

among other costs, the reasonable costs of planning the development,

including preliminary studies and surveys, neighborhood planning, and

architectural and engineering services, legal and incorporation expense,

the actual cost, if any, of alleviating hardship to families occupying

dwelling accommodations in the development area where such hardship

results from the execution of the development plan, the reasonable costs

of financing the development, including carrying charges during

construction, working capital in an amount not exceeding five per centum

of development cost, the actual cost of the real property included in

the development, or if such real property or any part thereof were

acquired partly or wholly in exchange for securities, then, an amount

which shall be approved by the supervising agency as being equal to the

reasonable value of the real property acquired therefor, the actual cost

of demolition of existing structures, the actual cost of utilities,

landscaping and roadways, the amount of special assessments subsequently

paid, the actual cost of construction, equipment and furnishing of

buildings and improvements, including architectural, engineering and

builder's fees, the actual cost of reconstruction, rehabilitation,

remodeling or initial repair of existing buildings and improvements,

reasonable management costs until the development is ready for use, and

the actual cost of improving that portion of the development area which

is to remain as open space, together with such additions to development

cost as shall equal the actual cost of additions to or changes in the

development in accordance with the original development plan or after

approved changes in or amendments thereto.

The term "development plan" shall mean a plan for the redevelopment of

all or any part of an area, and shall include any amendments thereto

approved in accordance with the requirements of paragraph five of

section two hundred three of this article.

The term "dividend year" shall mean, whether or not there exists a

maximum exemption period with respect to any one or more parcels of real

property, any of the recurrent periods of one year each ending on the

last day of the calendar month immediately preceding the calendar month

in which the assessment-rolls for the purpose of city taxes on real

property are finally warranted to the official, bureau, board,

commission or agency charged with collecting such taxes. The first

dividend year may be a period of less than one year commencing with the

beginning of the execution of the development plan and ending on such

last day of such calendar month.

The terms "local taxation" and "local tax" shall include state,

county, city, and school taxes, any special district taxes, and any

other tax on real property, but shall not include assessments for

benefit improvements.

The term "maximum assessed valuation" shall mean, with respect to any

local tax on any parcel of real property, the assessed valuation of such

parcel appearing on the last assessment-roll warranted to the official,

bureau, board, commission or agency charged with collecting the

particular local tax involved, before the commencement of the maximum

exemption period for such parcel.

The term "maximum exemption period" shall mean, with respect to any

parcel of real property, the period commencing with the acquisition of

such parcel by the redevelopment corporation, or the issuance of the

certificate of approval required by paragraph four of section two

hundred three of this article, whichever is later in time, and lasting

for such period, not exceeding ten years from the date of completion, as

certified to by the city department or body having jurisdiction over

buildings and improvements, of the buildings or improvements required to

be built on or made to such parcel by the development plan, as may be

designated in the ordinance or local law, if any, adopted or enacted by

the local legislative body pursuant to paragraph one of section two

hundred eleven of this article, but not in excess of the period of time

during which such parcel of real property is owned by the redevelopment

corporation.

The term "maximum dividend" shall mean, with respect to any dividend

year, an amount equal to five per centum of development cost less all

amounts payable during the dividend year as interest on, but not as

amortization of, any indebtedness of the redevelopment corporation. The

maximum dividend, however, may be apportioned in accordance with the

provisions of section two hundred seventeen of this article. The maximum

dividend may change from time to time in accordance with changes in

development cost, in outstanding indebtedness and in capital structure

due to refunding operations.

The term "maximum local tax" shall mean, with respect to each and

every local tax on any parcel of real property the local tax which would

have been payable on such parcel if the assessed valuation for the

purpose of such local tax had been, contrary to fact if need be, equal

to the maximum assessed valuation thereof.

The term "minimum condemnation requirement" shall mean land and

buildings or improvements constituting fifty-one per centum or more of

the land area and fifty-one per centum or more by assessed valuation for

the purpose of city taxes of the land and buildings or improvements, as

of the date of the issuance of the certificate of approval required by

paragraph four of section two hundred three of this article, of all land

and buildings or improvements fee title to which is to be acquired by

the redevelopment corporation pursuant to the development plan, which

are not exempt otherwise than by this article in whole or in part from

local taxation, which are included in that stage of the development plan

in which is located the real property sought to be condemned.

The term "planning commission" shall mean the official bureau, board,

commission or agency of the city established under the general city law

or under a home rule charter and authorized to prepare, adopt and amend

or modify a master plan for the development of the city.

The term "redevelopment" shall mean the clearance, replanning,

reconstruction or rehabilitation of an area or part thereof, and the

provision of such industrial, commercial, residential or public

structures or spaces as may be appropriate, including recreational and

other facilities incidental or appurtenant thereto.

The term "redevelopment corporation" shall mean a corporation

heretofore or hereafter organized pursuant to article four of the

business corporation law whose certificate of incorporation shall comply

with the requirements of section two hundred five of this article.

The term "supervising agency" shall mean the official, bureau,

commission or agency appointed, established or designated by the local

legislative body pursuant to section two hundred four of this article,

except that if there is a board of estimate in the city, it shall mean

such board of estimate.

§ 203 — Development plans and approval thereof

Development plans and approval thereof. 1. A development plan

shall contain such information as the planning commission and the

supervising agency shall, by rule or regulation require, including:

(a) A metes and bounds description of the development area;

(b) A statement of the real property in the development area fee title

to which the redevelopment corporation proposes to acquire and a

statement of the interests to be acquired in any other real property by

the redevelopment corporation;

(c) A statement of the various stages, if more than one is intended,

by which the development is proposed to be constructed or undertaken,

and the time limit for the completion of each stage, together with a

metes and bounds description of the real property to be included in each

stage;

(d) A statement of the existing buildings or improvements in the

development area, to be demolished immediately, if any;

(e) A statement of the existing buildings or improvements, in the

development area not to be demolished immediately, if any, and the

approximate period of time during which the demolition, if any, of each

such building or improvement is to take place;

(f) A statement of the proposed improvements, if any, to each building

not to be demolished immediately, any proposed repairs or alterations to

such building, and the approximate period of time during which such

improvements, repairs or alterations are to be made;

(g) A statement of the type, number and character of each new

industrial, commercial, residential or other building or improvement to

be erected or made; and a statement of the maximum limitations upon the

bulk of such buildings or improvements to be permitted at various stages

of the development plan;

(h) A statement of those portions, if any, of the development area

which may be permitted or will be required to be left as open space, the

use to which each such open space is to be put, the period of time each

such open space will be required to remain an open space and the manner

in which it will be improved and maintained, if at all;

(i) A statement of those portions, if any, of the development area

which the redevelopment corporation proposes to sell, donate, exchange

or lease to, with or from the city and an outline of the terms of such

proposed sale, donation, exchange or lease;

(j) A statement of the proposed changes, if any, in zoning ordinances

or maps, necessary or desirable for the development and its protection

against blighting influences;

(k) A statement of the proposed changes, if any, in streets or street

levels and any proposed street closings;

(l) A statement of the character of the existing dwelling

accommodations, if any, in the development area, the approximate number

of families residing therein, together with a schedule of the rentals

being paid by them, and a schedule of the vacancies in such

accommodations, together with the rental demanded therefor;

(m) A statement of the character, approximate number of units,

approximate rentals and approximate date of availability of the proposed

dwelling accommodations, if any, to be furnished during construction and

upon completion of the development;

(n) A statement of the proposed method of financing the development,

in sufficient detail to evidence the probability that the redevelopment

corporation will be able to finance or arrange to finance the

development;

(o) A statement of persons who it is proposed will be active in or

associated with the management of the redevelopment corporation during a

period of at least one year from the date of the approval of the

development plan.

The development plan, and any application to the planning commission

or supervising agency for approval thereof, may contain in addition such

other statements or material as may be deemed relevant by the proposer

thereof, including limits on the amounts which may be paid as

compensation for services to the officers and employees of the

redevelopment corporation, suggestions for the clearance, replanning,

reconstruction or rehabilitation of one or more areas which may be

larger than the development area but which include it, and any other

provisions for the redevelopment of such area or areas.

2. No development shall be initiated until certificates of approval of

the development plan therefor shall have been issued by both the

planning commission and the supervising agency.

3. A planning commission may approve a development plan after a public

hearing, but no certificate of approval thereof shall be issued by it

unless and until an application for approval has been filed with it,

together with the development plan, and unless and until the planning

commission shall determine:

(a) That the area within which the development area is included is

substandard or insanitary and that the redevelopment of the development

area in accordance with the development plan is necessary or advisable

to effectuate the public purposes declared in section two hundred one of

this article;

(b) That the development plan is in accord with the master plan, if

any, of the city;

(c) That the development area is not less than one hundred thousand

square feet in area, except that it may be smaller in area when

undertaken in connection with a public improvement, but in any event of

sufficient size to allow its redevelopment in an efficient and

economically satisfactory manner and to contribute substantially to the

improvement of the area in which the development is located;

(d) That the various stages, if any, by which the development is

proposed to be constructed or undertaken, as stated in the development

plan, are practicable and in the public interest;

(e) That public facilities, including, but not limited to, school,

fire, police, transportation, park, playground and recreation, are

presently adequate, or will be adequate, at the time that the

development is ready for use, to service the development area;

(f) That the proposed changes, if any, in the city map, in zoning

ordinances or maps and in streets and street levels, or any proposed

street closings, are necessary or desirable for the development and its

protection against blighting influences and for the city as a whole;

(g) Upon data submitted by or on behalf of the redevelopment

corporation, or upon data otherwise available to the planning

commission, that there will be available for occupation by families, if

any, then occupying dwelling accommodations in the development area

legal accommodations at substantially similar rentals in the development

area or elsewhere in a suitable location in the city, and that the

carrying into effect of the development plan will not cause undue

hardship to such families. The notice of the public hearing to be held

by the planning commission prior to approval by it of the development

plan shall contain separate statements to the effect that before the

development plan is approved, the planning commission must make the

determination required in subparagraph (g) of this paragraph three, and

that if the development plan is approved, real property in the

development area is, upon the conditions stated elsewhere in this

article, subject to condemnation.

Any such determination shall be conclusive evidence of the facts so

determined except upon proof of fraud or wilful misfeasance. In arriving

at such determination, the planning commission shall consider only those

elements of the development plan relevant to such determination under

subparagraphs (a) through (g) of this paragraph three of section two

hundred three of this article and to the type of development which is

physically desirable for the development area concerned from a city

planning viewpoint and from a neighborhood unit viewpoint if the

development plan provides that the development area is to be primarily

residential. Upon approval of a development plan by the planning

commission, it shall forthwith issue a certificate of approval thereof,

which may be made subject to subsequent approval of the changes, if any,

mentioned in subparagraph (f) of this paragraph three by the person,

commission or body having jurisdiction thereof.

4. A supervising agency may approve a development plan, but no

certificate of approval thereof shall be issued by it unless and until

the planning commission shall first have approved thereof and there has

been filed with the supervising agency the development plan, the

certificate of approval by the planning commission and an application

for approval by the supervising agency, and unless and until the

supervising agency shall determine:

(a) That the proposed method of financing the development is feasible

and that it is probable that the redevelopment corporation will be able

to finance or arrange to finance the development;

(b) That the persons who it is proposed will be active in or

associated with the management of the redevelopment corporation during a

period of at least one year from the date of the approval of the

development plan have sufficient ability and experience to cause the

development to be undertaken, consummated and managed in a satisfactory

manner.

Any such determination shall be conclusive evidence of the facts so

determined except upon proof of fraud or wilful misfeasance. In

considering whether or not a certificate of approval of the development

plan shall be issued, the supervising agency shall consider only those

elements of the development plan relevant to such determination under

subparagraphs (a) and (b) of this paragraph four of section two hundred

three of this article. Upon approval of a development plan by the

supervising agency, it shall forthwith issue a certificate of approval

thereof.

5. The planning commission and the supervising agency may approve an

amendment or amendments to a development plan, but no such amendment to

a development plan which has theretofore been approved by the planning

commission and the supervising agency shall be approved unless and until

an application therefor has been filed with the planning commission or

the supervising agency by the redevelopment corporation containing that

part of the material required by paragraph one of this section two

hundred three which shall be relevant to the proposed amendment, and

unless and until the planning commission or the supervising agency, as

the case may be, shall make the determinations required by paragraphs

three or four of this section two hundred three which shall be relevant

to the proposed amendment.

6. The planning commission and the supervising agency may each adopt a

reasonable schedule of fees to be paid upon the filing of the

development plan, amendments thereto and other instruments in connection

therewith.

7. The planning commission and the supervising agency may, for the

guidance of prospective proponents of development plans, fix general

standards to which a development plan shall conform. Variations from

such standards may be allowed for the accomplishment of the purposes of

this article. Such standards may contain provisions more restrictive

than those imposed by applicable planning, zoning, sanitary and building

laws, ordinances and regulations.

8. The state division of housing, or a local housing authority where

such exists, is hereby authorized to render such advisory services in

connection with the preliminary surveys, studies and preparation of a

development plan as may be requested by a redevelopment corporation or a

city planning commission and charge fees for such services on the basis

of actual cost.

§ 204 — Appointment of supervising agency

Appointment of supervising agency. The local legislative body

of a city is hereby authorized by general ordinance or local law to

appoint, establish or designate the chief financial officer of the city

or some other official or bureau, commission or agency as the person or

body to exercise the powers and perform the duties held by or incumbent

upon a supervising agency pursuant to this article, except that if there

is a board of estimate in the city no such appointment, establishment or

designation shall be made and the board of estimate shall exercise such

powers and perform such duties or may delegate one or more of them to

the chief financial officer of the city or to some other official,

bureau, commission or agency.

§ 205 — Redevelopment corporations

Redevelopment corporations. 1. Three or more persons may become

a redevelopment corporation on making, subscribing, acknowledging and

filing in the department of state a certificate pursuant to article four

of the business corporation law, which shall be entitled and endorsed

"Certificate of incorporation of .... Redevelopment Corporation,

pursuant to article four of the business corporation law," the blank

space being filled in with the remainder of the name of the corporation.

Such certificate shall contain the provisions required in, and may

contain any provisions consistent with the provisions of this article

permitted in, a certificate of incorporation filed pursuant to article

four of the business corporation law, except that:

(a) Included among the purposes for which the corporation is formed

shall be the formulation, obtaining the approval of, and putting into

effect of a development plan, the acquisition of real property in a

development area, and the construction, maintenance and operation of a

development pursuant to this article;

(b) The duration of the corporation shall be perpetual;

(c) The certificate may provide for the issuance of income debentures,

in which case the holders of such debentures may be allowed such voting

rights as shall be specified therein;

(d) The certificate shall contain a declaration that the redevelopment

corporation has been organized to serve a public purpose, and that it

shall be subject to supervision and control as provided in this article.

A copy of such certificate shall be filed with the planning commission

and the supervising agency having jurisdiction within ten days of its

being filed in the department of state.

2. If a redevelopment corporation shall not have obtained the

certificates of approval of its development plan required by section two

hundred three of this article within twelve months of the date upon

which it became a redevelopment corporation, or shall not substantially

comply with the development plan within the time limit for the

completion of each stage thereof as therein stated, reasonable delays

caused by unforseen difficulties excepted, then upon the filing in the

department of state of a certified copy of the order of the court

establishing such failure to obtain such certificate or substantially so

to comply, obtained pursuant to section two hundred thirteen of this

article, such redevelopment corporation shall cease to have the special

rights, powers and privileges granted to, or be subject to the special

duties, liabilities and restrictions imposed upon a redevelopment

corporation by this article, and shall thereafter change its name to

remove the word "Redevelopment" therefrom. In such event, however, such

corporation may thereafter continue in existence as a business

corporation, subject to the business corporation law. In the event that

a certified copy of such order shall be so filed, all real property

acquired by or for such redevelopment corporation by condemnation shall

be disposed of, either alone or in conjunction with additional real

property not so acquired, within a reasonable time by bona fide sale.

All amounts received by the redevelopment corporation for such real

property in excess of an amount equal to that portion of the development

cost allocable to the real property being disposed of, shall be paid to

the city.

3. No corporation now organized under the laws of the state shall

change its name to a name, and no such corporation hereafter organized

shall have a name, containing the word "redevelopment" as a part

thereof, unless and until such corporation is or becomes a redevelopment

corporation. No foreign corporation now authorized to do business in the

state shall change its name to a name, and no such corporation shall

hereafter be authorized to do business in the state with a name,

containing the word "redevelopment" as a part thereof.

§ 206 — Limitations of redevelopment corporations

Limitations of redevelopment corporations. No redevelopment

corporation shall:

1. Undertake any clearance, reconstruction, improvement, alteration or

construction in connection with any development until the certificates

of approval required by section two hundred three of this article have

been issued;

2. Change, alter, amend, add to or depart from the development plan

until the planning commission or the supervising agency, as the case may

be, has issued a certificate of approval of that portion of such change,

alteration, amendment, addition or departure relevant to the

determination required to be made by it as set forth in section two

hundred three of this article;

3. After a development has been commenced, sell, transfer or assign

any real property in the development area without first obtaining the

consent of the supervising agency;

4. Undertake more than one development;

5. Pay interest on its income debentures, if any, except out of net

earnings which would have been applicable to the payment of dividends on

its capital stock if there were no such income debentures;

6. Pay as compensation for services to, or enter into contracts for

the payment of compensation for services to, its officers or employees

in an amount greater than the limit thereon contained in the development

plan, or in default thereof, then in an amount greater than the

reasonable value of the services performed or to be performed by such

officers or employees;

7. Lease an entire building or improvement in the development area to

any person or corporation without obtaining the approval of the

supervising agency, which may be withheld only if the lease is being

made for the purpose of evading the provisions of this article;

8. Mortgage any of its real property without obtaining the approval of

the supervising agency;

9. Make any guarantee without obtaining the approval of the

supervising agency;

10. Dissolve without obtaining the approval of the supervising agency,

which may be given upon such conditions as the supervising agency may

deem necessary or appropriate to the protection of the interest of the

city in the proceeds of the sale of the real property acquired by

condemnation as provided in subdivision two of section two hundred five

of this article, such approval to be endorsed on the certificate of

dissolution and such certificate not to be filed in the department of

state in the absence of such endorsement;

11. Reorganize without obtaining the approval of the supervising

agency.

§ 207 — Application of other corporation laws to redevelopment corporations

Application of other corporation laws to redevelopment

corporations. The provisions of the business corporation law as

presently in effect and as hereafter from time to time amended, shall

apply to redevelopment corporations heretofore or hereafter, except

where such provisions are in conflict with the provisions of this

article. In the event that any action with respect to which the holders

of income debentures shall have the right to vote is proposed to be

taken, then notice of any meeting at which such action is proposed to be

taken shall be given to such holders in the same manner and to the same

extent as if they were stockholders entitled to notice of and to vote at

such meeting, and any certificate filed pursuant to law in the

department of state with respect to any such action, whether taken with

or without meeting, and any affidavit required by law to be annexed to

such certificate, shall contain the same statements or recitals and such

certificate shall be subscribed and acknowledged, and such affidavit

shall be made, in the same manner as if such holders were stockholders

holding shares of an additional class of stock entitled to vote on such

action, or with respect to the proceedings provided for in such

certificate.

§ 208 — Consideration for issuance of stock, bonds or income debentures

Consideration for issuance of stock, bonds or income

debentures. No redevelopment corporation shall issue stock, bonds or

income debentures, except for money or property actually received for

the use and lawful purposes of the corporation or services actually

performed for the corporation.

§ 209 — Determination of development cost

Determination of development cost. 1. Upon the completion of a

development a redevelopment corporation shall, or upon the completion of

a principal part of a development a redevelopment corporation may, file

with the supervising agency an audited statement of the development cost

thereof. Within a reasonable time after the filing of such statement,

the supervising agency shall determine the development cost applicable

to the development or such portion thereof and shall issue to the

redevelopment corporation a certificate stating the amount thereof as so

determined.

2. A redevelopment corporation may, at any time, whether prior or

subsequent to the undertaking of any contract or expense, apply to the

supervising agency for a ruling as to whether any particular item of

cost therein may be included in development cost when finally determined

by the supervising agency, and the amount thereof. The supervising

agency shall, within a reasonable time after such application, render a

ruling thereon, and in the event that it shall be ruled that any item of

cost may be included in development cost, the amount thereof as so

determined shall be so included in development cost when finally

determined.

§ 210 — Regulation of redevelopment corporations by supervising agency

Regulation of redevelopment corporations by supervising agency.

A redevelopment corporation shall:

1. Furnish to the supervising agency from time to time, as required by

it, but with respect to regular reports not more often than once every

six months, such financial information, statements, audited reports or

other material as such supervising agency shall require, each of which

shall conform to such standards of accounting and financial procedure as

the supervising agency may by general regulation prescribe.

2. Establish and maintain such depreciation and other reserves,

surplus and other accounts as the supervising agency may reasonably

require, including a yearly reserve with respect to each parcel of real

property held by the redevelopment corporation against the increase in

local taxes after the expiration of the maximum exemption period, which

shall be equal to twenty per centum of the difference between the

maximum local tax on the real property of the redevelopment corporation

and the local tax which would have been payable except for the tax

exemption period provided for in section two hundred eleven of this

article.

Any provision of the general corporation law or the stock corporation

law to the contrary notwithstanding, one member of the board of

directors of a redevelopment corporation may be a designee of the

supervising agency, as long as any of the real property of the

redevelopment corporation is entitled to the tax exemption provided for

in section two hundred eleven of this article.

§ 211 — Exemption from increase in local taxation

Exemption from increase in local taxation. 1. A local

legislative body is hereby authorized, by adopting or enacting an

ordinance or local law, to exempt all or part of the real property held

by redevelopment corporations during a maximum exemption period, which

shall not exceed ten years, which represents an increase in any local

tax over the maximum local tax. After the adoption or enactment of such

an ordinance or local law, every parcel of real property held by any

redevelopment corporation in the city shall be exempt during the maximum

exemption period, from that portion of each and every local tax to the

extent that such exemption has been granted by such ordinance or local

law. If, during the last year of the maximum exemption period, such

exemption is in existence on the day such local tax, or installment

thereof, becomes a lien on such parcel of real property, such exemption

shall extend for the full tax year for such local tax and shall not be

apportioned because of the expiration of the maximum exemption period

during such tax year.

2. For the purpose of fixing the date of commencement of the maximum

exemption period for a group of parcels of real property in a

development area, a city is hereby authorized, with the approval of its

local legislative body, except that if there is a board of estimate in

the city, then with the approval of the board of estimate, to contract

with a redevelopment corporation to place in one or more groups the

various parcels of real property therein. Such a contract may provide

that all of the parcels in each group may be deemed to have had a common

stated date of acquisition by the redevelopment corporation, regardless

of the actual date of acquisition of each parcel contained therein. Such

agreed date of acquisition shall thereupon serve as a basis for

computing the maximum exemption period for each parcel of real property

in the group. Such agreed date of acquisition shall not be later than

the date of the actual acquisition of one or more parcels of real

property in the group. After the making of any such contract, all of the

parcels of real property in any such group shall be treated as a unit

for the purposes of the assessment and collection of each local tax, and

the maximum exemption period so computed shall be binding with respect

to each local tax.

§ 212 — Limited return on income debentures and stock

Limited return on income debentures and stock. 1. No

redevelopment corporation shall pay any interest on its income

debentures or dividends on its stock during any dividend year, unless

there shall exist at the time of any such payment no default under any

amortization requirements with respect to its indebtedness.

2. No redevelopment corporation shall pay or declare as interest on

its income debentures and as dividends on its stock during any dividend

year during any portion of which there shall exist pursuant to section

two hundred eleven of this article any exemption from local taxation on

any of its real property, an amount which in the aggregate is in excess

of the maximum dividend, except as provided in paragraphs three and four

of this section two hundred twelve.

3. In the event that in any dividend year the maximum exemption period

with respect to some of the parcels of real property held by a

redevelopment corporation shall have expired, and with respect to some

such parcels shall not have expired, then that portion of its net

earnings which may be paid or declared as interest on its income

debentures and as dividends on its stock during such dividend year shall

be determined as follows: multiply the net earnings of the corporation

subject to payment or declaration as such interest or dividends, by a

fraction the numerator of which is the total of the maximum assessed

valuation of all real property for which the maximum exemption period

has not expired and the denominator of which is the total of the maximum

assessed valuation of all the real property of the corporation; and the

result will be the apportioned net earnings restricted as to payment as

such interest or dividends; compute the amount of the maximum dividend

as though no apportionment of the same were to be affected and multiply

the amount so arrived at by the same fraction; and the result will be

the apportioned maximum dividend; only that portion of such apportioned

net earnings which does not exceed such apportioned maximum dividend may

be paid or declared as such interest or dividends; and that portion of

the net earnings obtained by subtracting from total net earnings such

apportioned net earnings restricted as to payment as such interest and

dividends may be paid or declared without restriction as such interest

or dividends.

4. In the event that in any one or more prior dividend years the total

amount paid or declared as interest on the corporation's income

debentures or as dividends on its stock shall have been less than the

amounts allowable pursuant to paragraphs two and three of this section

two hundred twelve, then cumulative interest and dividends equal to the

difference may be paid out of any net income applicable thereto in any

subsequent dividend year despite the limitation imposed by paragraph two

of this section two hundred twelve.

§ 213 — Enforcement proceedings against redevelopment corporations

Enforcement proceedings against redevelopment corporations.

Whenever a redevelopment corporation shall not have obtained the

certificates of approval of its development plan required by section two

hundred three of this article within twelve months of the date upon

which it became a redevelopment corporation, or shall not have

substantially complied with its development plan within the time limits

for the completion of each stage thereof as therein stated, reasonable

delays caused by unforeseen difficulties excepted, or shall do, permit

to be done or fail or omit to do anything contrary to or required of it,

as the case may be, by this article, or shall be about so to do, permit

to be done or fail or omit to have done, as the case may be, then any

such fact may be certified by the planning commission or the supervising

agency, whichever shall have supervision thereof, to the chief legal

officer of the city, who may thereupon commence a proceeding in the

supreme court of the state of New York in its name for the purpose of

having such action, failure or omission, or threatened action, failure

or omission, established by order of the court for the purpose stated in

subdivision two of section two hundred five of this article, or stopped,

prevented or otherwise rectified by order, injunction or otherwise. Such

proceeding shall be commenced by a petition to the supreme court

alleging the violation complained of and praying for appropriate relief.

It shall thereupon be the duty of the court to specify the time, not

exceeding twenty days after service of a copy of the petition, within

which the redevelopment corporation complained of must answer the

petition. The court shall, immediately after a default in answering or

after answer, as the case may be, inquire into the facts and

circumstances in such manner as the court shall direct without other or

formal proceedings, and without respect to any technical requirements.

Such other persons or corporations as it shall seem to the court

necessary or proper to join as parties in order to make its order or

judgment effective may be joined as parties. The final judgment or order

in any such action or proceeding shall dismiss the action or proceeding

or establish the failure complained of or direct that an order, or an

injunction, or both, issue, or grant such other relief as the court may

deem appropriate.

§ 214 — Transfer of real property to redevelopment corporation

Transfer of real property to redevelopment corporation.

Notwithstanding any requirement of law to the contrary or the absence of

direct provision therefor in the instrument under which a fiduciary is

acting, every executor, administrator, trustee, guardian or other

person, holding trust funds or acting in a fiduciary capacity, unless

the instrument under which such fiduciary is acting expressly forbids,

the state, its subdivisions, cities, all other public bodies, all public

officers, corporations organized under or subject to the provisions of

the banking law (including savings banks, savings and loan associations,

trust companies, private bankers and private banking corporations), the

superintendent of financial services as conservator, liquidator or

rehabilitator of any such person, partnership or corporation, persons,

partnerships and corporations organized under or subject to the

provisions of the insurance law, the superintendent of financial

services as conservator, liquidator or rehabilitator of any such person,

partnership or corporation, any of which owns or holds any real property

within a development area, may grant, sell, lease or otherwise transfer

any such real property to a redevelopment corporation, and receive and

hold any cash, stocks, income debentures, mortgages, or other securities

or obligations, secured or unsecured, exchanged therefor by such

redevelopment corporation, and may execute such instruments and do such

acts as may be deemed necessary or desirable by them or it and by the

redevelopment corporation in connection with the development and the

development plan.

§ 215 — Methods of acquisition of real property

Methods of acquisition of real property. 1. A redevelopment

corporation may:

(a) Whether before or after the certificates of approval of its

development plan required by section two hundred three of this article

have been issued, acquire real property or secure options in its own

name or in the name of nominees to acquire real property, by gift,

grant, lease, purchase or otherwise, or awards in condemnation made or

to be made therefor;

(b) After a certificate of approval of condemnation with respect to

the real property in question has been issued pursuant to section two

hundred sixteen of this article, acquire all or any portion of the real

property included in such certificate of approval of condemnation not

already under contracts of sale or option to it, by condemnation in the

manner provided by the condemnation law, with such departures therefrom

as are provided in this article.

2. A city may, upon request by a redevelopment corporation, and after

a certificate of approval of condemnation with respect to the real

property in question has been issued pursuant to section two hundred

sixteen of this article, acquire, or obligate itself to acquire, for

such redevelopment corporation any real property included in such

certificate of approval of condemnation, by gift, grant, lease,

purchase, condemnation, or otherwise, according to the provisions of any

appropriate general, special or local law applicable to the acquisition

of real property by the city. Real property acquired by a city for a

redevelopment corporation shall be conveyed by such city to the

redevelopment corporation upon payment to the city of all sums expended

or required to be expended by the city in the acquisition of such real

property.

3. The provisions of this article with respect to the condemnation of

real property by or for a redevelopment corporation or by a city for a

redevelopment corporation shall prevail over the provisions of any other

general, special or local law.

§ 216 — Proceedings to acquire

Proceedings to acquire. 1. When it is desired that any real

property in a development area be acquired by condemnation, there shall

be presented to the supervising agency by the redevelopment corporation

a verified petition requesting the issuance of a certificate of approval

of condemnation of such real property which shall contain, among other

things:

(a) A metes and bounds description of the real property involved and a

statement of the estate, interest, privileges, franchise or right

therein or appurtenant thereto to be condemned;

(b) Proof that such real property is within the development area;

(c) Proof that the redevelopment corporation has acquired the fee

title, or valid and enforceable options or contracts for the acquisition

of such title to or in real property satisfying the minimum condemnation

requirement; and

(d) Proof that certificates of approval of the development plan

required by section two hundred three of this article have been issued.

The supervising agency shall determine within a reasonable time

thereafter the truth or sufficiency of the statements and proof

contained in such petition, and, if such determination shall be in the

affirmative, the supervising agency shall issue to the petitioner a

certificate of approval of condemnation. Such certificate shall contain

a description of the real property proposed to be condemned, the facts

so determined with respect thereto, and a statement that the real

property proposed to be condemned is required for a public use and that

its acquisition for such use is necessary. A certified copy of such

certificate of approval of condemnation shall be conclusive evidence of

the facts stated therein in any condemnation proceeding to acquire the

real property, or any part thereof, described in such certificate. No

condemnation proceeding to acquire real property in a development area,

whether by a redevelopment corporation or by a city for a redevelopment

corporation, shall be commenced until such a certificate of approval of

condemnation shall have been issued.

2. Acquisition proceedings by a redevelopment corporation shall be

instituted pursuant to the provisions of the eminent domain procedure

law.

3. Condemnation proceedings for a redevelopment corporation shall be

initiated by a petition to the city to institute proceedings to acquire

for the redevelopment corporation any real property in the development

area. Such petition shall be granted or rejected by the local

legislative body, or if there is a board of estimate in the city then by

the board of estimate, and the resolution or resolutions granting such

petition shall contain a requirement that the redevelopment corporation

shall pay to the city all sums expended or required to be expended by

the city in the acquisition of such real property, and the time of

payment and manner of securing payment thereof, and may require that the

city shall receive, before proceeding with the acquisition of such real

property, such assurances as to payment or reimbursement by the

redevelopment corporation, or otherwise, as the city may deem advisable.

Upon the passage of a resolution or resolutions by the local legislative

body or the board of estimate, as the case may be, granting the

petition, the redevelopment corporation shall cause to be made three

copies of surveys or maps of the real property described in the

petition, one of which shall be filed in the office of the redevelopment

corporation, one in the office of the corporation counsel or chief law

officer of the city, and one in the office in which instruments

affecting real property in the county are recorded. The filing of such

copies of surveys or maps shall constitute the acceptance by the

redevelopment corporation of the terms and conditions contained in such

resolution or resolutions. The city shall proceed under any provision of

any general, special or local law applicable to the condemnation of real

property for public improvements. When title to the real property shall

have vested in the city, it shall convey the same to the redevelopment

corporation upon payment by the redevelopment corporation of the sums

and the giving of the security required by the resolution granting the

petition. As soon as title shall have vested in the city, the

redevelopment corporation may, upon the authorization of the chief

executive officer of the city, enter upon the real property taken, take

over and dispose of existing improvements, and carry out the terms of

the development plan with respect thereto.

4. The following provisions shall apply to any proceedings for the

assessment of compensation and damages for real property in a

development area taken or to be taken by condemnation by or for a

redevelopment corporation:

(a) At any stage of the proceeding, the court may require such prior

notice to be given of an intention to introduce evidence as to the sale,

option, leasing or tenancy of real property other than the real property

directly involved in the proceeding and of particulars relating thereto

as it may deem necessary to prevent surprise.

(b) The deposition of any person, whether or not a party, may be taken

in the manner provided by article thirty-one of the civil practice law

and rules, and the provisions of this section. Such deposition may be

taken upon any question or issue in the proceeding, including the facts

as to any sale, option, lease or tenancy admissible in evidence pursuant

to subdivision four hereof. The deposition may be taken at the instance

of the redevelopment corporation, the city, or of any owner, or at the

direction of the court, at any time during the pendency of the action or

proceeding. At least five days' notice, or if service is through the

mails, at least eight days' notice, shall be given of the taking of the

testimony, if on the part of an owner, to the redevelopment corporation

or city, as the case may be, and to all other owners who have appeared

in the proceeding; if by the redevelopment corporation or a city, to all

owners who have appeared in the proceeding.

(c) For the purposes of this article, the award of compensation shall

not be increased by reason of any increase in the value of the real

property caused by the assembly, clearance or reconstruction, or

proposed assembly, clearance or reconstruction for the purposes of this

article of the real property in the development area. No allowance shall

be made for improvements begun on real property after notice to the

owner of such property of the institution of the proceedings to condemn

such property.

(d) Evidence shall be admissible bearing upon the insanitary, unsafe

or substandard condition of the premises, or the illegal use thereof, or

the enhancement of rentals from such illegal use, and such evidence may

be considered in fixing the compensation to be paid, notwithstanding

that no steps to remedy or abate such conditions have been taken by the

department or officers having jurisdiction. If a violation order is on

file against the premises in any such department, it shall constitute

prima facie evidence of the existence of the condition specified in such

order.

(e) If any of the real property in the development area which is to be

acquired by condemnation has, prior to such acquisition, been devoted to

another public use, it may nevertheless be acquired provided that no

real property belonging to the city or to any other governmental body,

or agency or instrumentality thereof, corporate or otherwise, may be

acquired without its consent. No real property belonging to a public

utility corporation may be acquired without the approval of the

commission or other officer or tribunal having regulatory power over

such corporation.

(f) Upon the trial, evidence of the price and other terms upon a sale

or assignment or of a contract for the sale or assignment of a mortgage,

award, proposed award, transfer of a tax lien or lien of a judgment

relating to property taken, shall be relevant, material and competent,

upon the issue of value or damage and shall be admissible on direct

examination.

(g) Upon the trial a statement, affidavit, deposition, report,

transcript of testimony in an action or proceeding, or appraisal made or

given by any owner or prior owner of the premises taken, or by any

person on his behalf, to any court, governmental bureau, department or

agency respecting the value of the real property for tax purposes, shall

be relevant, material and competent upon the issue of value of damage

and shall be admissible on direct examination.

(h) The term "owner," as used in this section two hundred sixteen,

shall include a person having an estate, interest or easement in the

real property to be acquired or a lien, charge or encumbrance thereon.

§ 217 — Temporary use or occupation of real property taken by acquisition

Temporary use or occupation of real property taken by

acquisition. When title to real property has vested in a redevelopment

corporation or city by gift, grant, devise, purchase or in acquisition

proceedings or otherwise, the redevelopment corporation or city, as the

case may be, may in accordance with the provisions of the eminent domain

procedure law agree with the previous owners of such property, or any

tenants continuing to occupy or use it, or any other persons who may

occupy or use or seek to occupy or use such property, that such former

owner, tenant or other persons may occupy or use such property upon the

payment of a fixed sum of money for a definite term or upon the payment

periodically of an agreed sum of money.

In the event that a city has acquired real property for a

redevelopment corporation, the city shall, in transferring title to the

redevelopment corporation, deduct from the consideration or other moneys

which the redevelopment corporation has become obligated to pay to the

city for such purpose, and credit the redevelopment corporation with,

the amounts received by the city as payment for temporary occupation and

use of the real property by a former owner, tenant, or other person, as

in this section two hundred seventeen provided, less the cost and

expense incurred by the city for the maintenance and operation of such

real property.

§ 218 — Mortgages

Mortgages. 1. Any redevelopment corporation may borrow funds

and secure the repayment thereof by mortgage. Every such mortgage shall

contain reasonable amortization provisions and shall be a lien upon no

other real property except that forming the whole or a part of a single

development area.

2. Certificates, bonds and notes, or part interests therein, or any

part of an issue thereof, which are issued by a redevelopment

corporation and secured by a first mortgage on the real property of the

redevelopment corporation, or any part thereof, shall be securities in

which all the following persons, partnerships or corporations and public

bodies or public officers may legally invest the funds within their

control, provided that the principal amount thereof shall not exceed the

limits, if any, imposed by law for such investments by the person,

partnership, corporation, public body or public officer making the same:

every executor, administrator, trustee, guardian, committee, conservator

or other person or corporation holding trust funds or acting in a

fiduciary capacity; the state, its subdivisions, cities, all other

public bodies, all public officers; persons, partnerships and

corporations organized under or subject to the provisions of the banking

law (including savings banks, savings and loan associations, trust

companies, bankers and private banking corporations); the superintendent

of financial services as conservator, liquidator or rehabilitator of any

such person, partnership or corporation; persons, partnerships or

corporations organized under or subject to the provisions of the

insurance law; and the superintendent of financial services as

conservator, liquidator or rehabilitator of any such person, partnership

or corporation.

3. Any mortgage on the real property in a development area, or any

part thereof, may create a first lien, or a second or other junior lien,

upon such real property.

4. The limits as to principal amount secured by mortgage referred to

in paragraph two of this section two hundred eighteen shall not apply to

certificates, bonds and notes, or part interests therein, or any part of

an issue thereof, which are secured by first mortgage on real property

in a development area, or any part thereof, which the federal housing

administrator has insured or has made a commitment to insure under the

national housing act. Any such person, partnership, corporation, public

body or public officer may receive and hold any debentures, certificates

or other instruments issued or delivered by the federal housing

administrator, pursuant to the national housing act, in compliance with

the contract of insurance of a mortgage on real property in the

development area, or any part thereof.

§ 219 — Sale or lease of real property by a city to a redevelopment corporation

Sale or lease of real property by a city to a redevelopment

corporation. 1. The local legislative body, or if there is a board of

estimate in the city, then the board of estimate, may by resolution

determine that real property, title to which is held by the city,

specified and described in such resolution, is not required for use by

the city and may authorize the city to sell or lease such real property

to a redevelopment corporation; provided, however, that the title of the

city to such real property be not declared inalienable by charter of the

city, or other similar law or instrument.

2. Notwithstanding the provisions of any general, special or local law

or ordinance, such sale or lease may be made without appraisal, public

notice or public bidding for such price or rental and upon such terms

(and, in case of a lease, for such term not exceeding fifty years with a

right to one renewal term of thirty years) as may be agreed upon between

the city and the redevelopment corporation.

3. Before any sale or lease to a redevelopment corporation shall be

authorized, a public hearing shall be held by the local legislative

body, or by the board of estimate, as the case may be, to consider the

proposed sale or lease.

4. Notice of such hearing shall be published at least ten days before

the date set for the hearing in such publication and in such manner as

may be designated by the local legislative body, or the board of

estimate, as the case may be.

5. The deed or lease of such real property shall be executed in the

same manner as a deed or lease by the city of other real property owned

by it and may contain appropriate conditions and provisions to enable

the city to reenter the real property in the event of a violation by the

redevelopment corporation of any of the provisions of this article

relating to such redevelopment corporation or of the conditions or

provisions of such deed or lease.

6. A redevelopment corporation purchasing or leasing real property

from a city shall not, without the written approval of the city, use

such real property for any purpose except in connection with its

development. The deed shall contain a condition that the redevelopment

corporation will devote the real property granted only for the purposes

of its development subject to the restrictions of this article, for

breach of which the city shall have the right to reenter and repossess

itself of the real property.

§ 220 — Provisions of lease

Provisions of lease. If real property of a city be leased to a

redevelopment corporation:

1. The lease may provide that all improvements shall be the property

of the lessor;

2. The lessor may grant to the redevelopment corporation the right to

mortgage the fee of such property and thus enable the redevelopment

corporation to give as security for its notes or bonds a first lien upon

the land and improvements;

3. The execution of a lease shall not impose upon the lessor any

liability or obligation in connection with or arising out of the

financing, construction, management or operation of a development

involving the land so leased. The lessor shall not, by executing such

lease, incur any obligation or liability with respect to such leased

premises other than may devolve upon the lessor with respect to premises

not owned by it. The lessor, by consenting to the execution by a

redevelopment corporation of a mortgage upon the leased land, shall not

thereby assume, and such consent shall not be construed as imposing upon

the lessor, any liability upon the note or bond secured by the mortgage;

4. The lease may reserve such easements or other rights in connection

with the real property as may be deemed necessary or desirable for the

future planning and development of the city and the extension of public

facilities therein (including the construction of subways and conduits,

the widening and change of grade of streets); and it may contain such

other provisions for the protection of the parties as are not

inconsistent with the provisions of this article.

§ 221 — Construction

Construction. This article shall be construed liberally to

effectuate the purposes hereof, and the enumeration of specific powers

in this article shall not operate to restrict the meaning of any general

grant of power contained in this article or to exclude other powers

comprehended in such general grant.

ARTICLE 6-A Community Development Corporations

§ 250 — Short title

Short title. This article shall be known and may be cited as

the "Community Development Corporations Act".

§ 251 — Policy and purposes of article

Policy and purposes of article. It is the policy of the state

to promote the reconstruction and redevelopment of municipal urban

renewal areas in a manner that will serve the civic, cultural and

recreational needs of the community as a whole. There is need for local

non-profit corporations to construct, with mortgage loan participation

by the New York state housing finance agency and in furtherance of an

urban renewal plan, civic, cultural and recreational structures and

facilities and other capital development projects invested with a public

interest, for the accomplishment of the purposes of article eighteen of

the constitution and articles fifteen and fifteen-A of the general

municipal law.

§ 252 — Definitions

Definitions. As used in this article, unless a different

meaning clearly appears from the context: 1. "Agency", "area" and "plan"

shall mean agency, urban renewal area and urban renewal plan,

respectively, as defined in article fifteen of the general municipal

law.

2. "Municipality" shall mean the city, town or village in which a

community development corporation conducts or proposes to conduct its

activities.

3. "Project" shall mean a non-profit capital development project

invested with a public interest, including facilities incidental or

appurtenant thereto and all lands, buildings and improvements acquired,

owned, constructed, maintained or operated pursuant to this article, or

any combination thereof. It shall include but not be limited to civic

auditoriums, libraries, museums and recreational centers.

§ 253 — Incorporation and organization

Incorporation and organization. Community development

corporations shall be incorporated and organized in the manner provided

in the not-for-profit corporation law for not-for-profit corporations,

except that the certificate of incorporation shall be approved by the

commissioner instead of such approval or approvals as may be required by

the not-for-profit corporation law. In addition to those matters

required to be set forth in the certificate of incorporation by the

not-for-profit corporation law, the certificate shall state:

1. That the real property of the corporation shall not be sold,

transferred, encumbered or assigned except as permitted by the

provisions of this article.

2. That the corporation has been organized exclusively to serve a

civic, cultural or recreational purpose, or any combination thereof, and

that it shall be and remain subject to the supervision and control of

the commissioner.

3. That all income and earnings of the corporation shall be used

exclusively for its corporate purposes.

4. That no part of the net income or net earnings of the corporation

shall inure to the benefit or profit of any private individual, firm or

corporation.

§ 254 — Powers and limitations

Powers and limitations. 1. Except as is inconsistent with the

provisions of this article, a community development corporation shall

have, in carrying out the purposes of this article, the powers conferred

on corporations by the general corporation law and the business

corporation law, and shall be subject to the limitations contained

therein.

2. Community development corporations shall have the following

additional powers:

(a) To construct, reconstruct, improve, alter, repair, lease, manage,

operate and otherwise provide projects;

(b) To enter into contracts with the New York state housing finance

agency for mortgage loans;

(c) To receive assistance from the state, the federal government,

municipalities and any person, firm or corporation, by contract or

otherwise; and to comply, subject to the provisions of this article,

with the terms and conditions of such assistance;

(d) Subject to the approval of the commissioner, to sell, lease or

otherwise dispose of any of its real property, or any appurtenances

thereto or any interest therein, to the municipality or to any person,

firm or public or private corporation approved by the municipality by

resolution of its local legislative body. In the case of a lease or

other disposition not divesting such corporation of title, such approval

of the municipality may be conditioned upon the making of pro rata

payments in lieu of taxes to the municipality;

(e) To borrow money and give mortgages and other liens on its real and

personal property to secure the repayment thereof, and to issue its

notes, bonds or other obligations and to provide for the rights of the

holders thereof;

(f) Subject to the approval of the commissioner, to enter into

agreements to pay annual sums in lieu of taxes to any political

subdivision of the state with respect to any of its real property;

provided, however, that the amount so paid for any year upon any such

property shall not exceed the sum last paid as taxes on such property

prior to the time of its acquisition by the corporation, or by the

municipality if such property has been conveyed by the municipality to

the corporation, plus any sum or sums attributable as taxes to such

parts or portions of such real property as may be operated for profit,

under lease or otherwise by or for the benefit of any private person,

firm or corporation.

3. No community development corporation shall:

(a) Acquire any real property or interest therein unless such

corporation shall first have obtained from the commissioner a

certificate that such acquisition is consistent with the purposes of

this article.

(b) Pay interest on its mortgage indebtedness at a rate higher than

six per centum per annum or upon its notes, bonds or other obligations.

(c) Issue notes, bonds or other obligations relating to any project in

an aggregate amount greater than the project cost.

(d) Without first having obtained the written consent of the

commissioner:

(i) Construct, reconstruct, improve or alter any project, or enter

into any contract therefor.

(ii) Sell, transfer or assign any real property, except that no such

consent shall be necessary in any sale in foreclosure.

(iii) Except as otherwise provided in this article, encumber or lease

all or any part of its real property to any other person or corporation.

(iv) Enter into contracts for the operation of the project.

(v) Enter into contracts for the payment of salaries to officers or

employees.

(vi) Make a guaranty of payment or pledge any or all of its assets,

income or revenues to secure payment of its obligations.

(vii) Voluntarily dissolve.

§ 255 — Members, officers and directors

Members, officers and directors. 1. No member or director of a

community development corporation shall receive any salary or other

compensation for services, other than reimbursement of actual and

necessary expenses incurred in the performance of his duties. No member,

officer or employee of a community development corporation shall acquire

any interest, direct or indirect, in any property then or thereafter

included or planned to be included in a project, nor retain any interest

direct or indirect in any property acquired subsequent to his

appointment or employment which is later included or to his knowledge

planned to be included in a project. If any member, officer or employee

of any community development corporation owns or controls an interest

direct or indirect in any property included in a project, which was

acquired prior to his appointment or employment, he shall disclose such

interest and the date of acquisition thereof in writing to the community

development corporation and such disclosure shall be entered upon the

minutes of the community development corporation.

2. The provisions of the not-for-profit corporation law shall govern

membership in community development corporations, qualification of

voters, meetings and notices thereof, and selection of officers and

directors.

§ 256 — Mortgage loans

Mortgage loans. The New York state housing finance agency may

enter into contracts for loans to community development corporations for

one or more projects. No loan shall be made in an amount greater than

ninety-five per centum of the project cost, plus working capital in an

amount not to exceed two per centum of the project cost. Any such loan

shall be secured by a first mortgage lien upon all of the real property

of which the project consists and upon all fixtures and articles of

personal property attached to or used in conjunction with the operation

of such project. The agency may make temporary loans or advances to a

community development corporation in anticipation of such loan and no

such temporary loan or advance shall be deemed to constitute part of

such loan unless such temporary loan or advance has been made out of the

proceeds of definitive bonds sold by the agency pursuant to the

provisions of section forty-six of this chapter.

§ 257 — Conditions and security for loans

Conditions and security for loans. 1. No loan shall be made to

a community development corporation for a project unless (a) the

planning commission, if any, of the municipality has approved the

project; (b) the local legislative body of the municipality, after a

public hearing, has approved the project and has enacted or will enact

regulations or appropriate restrictions adequately protecting the

project against future uses likely to depreciate unduly the value of

such project and has, by resolution, found that the project will aid in

the replanning, reconstruction or redevelopment of an urban renewal

area, as defined in article fifteen of the general municipal law, or

will provide facilities incidental or appurtenant to an urban renewal

project, as defined in article fifteen of the general municipal law, and

(c) the commissioner has found that:

(i) the estimated revenues of the project or the monies of the

corporation will be sufficient to cover all probable costs of operation

and maintenance, all fixed charges and operating reserves and

depreciation reserves if any;

(ii) the plans and specifications conform to the requirements of all

laws applicable thereto and assure light, air, sanitation and fire

protection;

(iii) the project is in conformity with an approved urban renewal

plan, as defined in article fifteen of the general municipal law.

§ 258 — Transfer of real property

Transfer of real property. 1. Notwithstanding any requirement

of law to the contrary or any provision of any general, special or local

law, charter or ordinance, every executor, administrator, trustee,

guardian or other person holding trust funds or acting in a fiduciary

capacity, unless the instrument under which such fiduciary is acting

expressly forbids, and the state, its subdivisions, municipalities, all

other public bodies, all public officers, persons, partnerships and

corporations owning or holding any real property, may grant, sell, lease

or otherwise transfer any such real property or interest therein to a

community development corporation and receive and hold any cash, bonds,

notes, mortgages or other securities or obligations, secured or

unsecured, exchanged therefor by such corporation and may execute such

instruments and do such acts as may be deemed necessary or desirable by

them or it and by the corporation in connection with a project or

projects, and such sale, lease or transfer may be made without public

auction or bidding; provided, however, that where such real property is

within a municipal urban renewal area the disposition thereof shall be

in accordance with the provisions of paragraph (d) of subdivision two of

section five hundred seven of the general municipal law.

2. The municipality may take property by condemnation for a community

development corporation pursuant to the provisions of article nine of

this chapter and transfer the same to such corporation as provided in

subdivision one of this section.

§ 259 — Supervision and regulation

Supervision and regulation. The commissioner may from time to

time make, amend and repeal rules and regulations for the supervision,

examination, regulation and audit of community development corporations

and for carrying into effect the provisions and purposes of this

article.

§ 260 — Tax exemption

Tax exemption. The property of a community development

corporation and its income and operations shall be exempt from taxation.

§ 261 — Separability

Separability. If any clause, sentence, paragraph, section or

part of this article shall be adjudged by any court of competent

jurisdiction to be invalid, such judgment shall not affect, impair or

invalidate the remainder thereof, but shall be confined in its operation

to the clause, sentence, paragraph, section or part thereof directly

involved in the controversy in which such judgment shall have been

rendered.

ARTICLE 7 Mortgage Facilities Corporation

§ 300 — Short title

Short title. This article shall be known and may be cited and

referred to as the "mortgage facilities corporation law".

§ 301 — Policy of state and purpose of article

Policy of state and purpose of article. It is recognized that

there exist in New York state certain neighborhoods, which, because of

heavy in-migrations and other factors, have been characterized by

over-crowding of population, extensive absentee ownership, and

concentrated occupancy particularly by racial minorities. Because of the

special appraisal and servicing problems peculiar to such areas the

supply of available mortgage money in these areas is insufficient. It is

the declared policy of the state that a medium be established, owned and

financed entirely through private enterprise institutions, through which

the mortgage money necessary to re-establish these neighborhoods as

sound communities would be made available on a sound profit-making

basis.

§ 302 — Definitions

Definitions. 1. The term "housing accommodation," as used in

this article, shall mean any building or structure which is used or

occupied, or is intended to be used or occupied, wholly or partly, as

the home or residence of one or more human beings.

2. The term "improved real property," as used in this article, shall

include real property upon which a housing accommodation is to be built,

in whole or in part, out of the proceeds of the loan, which when

completed will constitute a permanent improvement.

3. The terms "encumbered" and "unencumbered," as used in this article,

shall have the same meaning as in paragraph six of subsection (a) of

section one thousand four hundred four of the insurance law.

§ 303 — Establishment of corporation

Establishment of corporation. There is hereby created a

corporation which shall be known as "The Mortgage Facilities

Corporation." The principal office of the corporation shall be in the

borough of Manhattan in the county of New York. Within ten days after

such office is established and, within ten days after the removal of

such office, the corporation shall notify the secretary of state of the

street address in such borough where its principal office is located,

and the secretary of state shall note such address upon his records.

Except as otherwise provided in this article, the corporation shall be

possessed of all the powers, privileges and immunities which now are or

hereafter may be conferred on corporations with capital stock by the

stock corporation law and the general corporation law or the business

corporation law and for such purposes shall be deemed to have been

organized under the provisions of said laws. Process in any action or

proceeding against the corporation may be served upon the secretary of

state, as the agent of the corporation for such purposes. Such process

shall be served in the manner prescribed in section three hundred six of

the business corporation law for service against a domestic business or

transportation corporation, accompanied by the fee for such service as

prescribed therein and the secretary of state shall forthwith send one

of the copies served upon him to the corporation at its principal

office. If such corporation fails to commence business by June first,

nineteen hundred fifty-seven, its existence shall terminate and the

provisions of this article shall become null and void. For the purposes

of this section only the corporation shall be deemed to have commenced

business when two and one-half per centum of the capital stock thereof

shall have been paid into the treasury and ten members shall have

qualified as hereinafter provided. Once having commenced business, the

duration of the corporation shall be perpetual.

§ 304 — Purposes, powers and operation

Purposes, powers and operation. 1. The purpose of the

corporation shall be to assist, promote, encourage and stimulate the

development and rehabilitation of blighted areas by rendering financial

assistance in the construction, rehabilitation or purchase of housing

accommodations in blighted or deteriorating urban areas in this state by

making first mortgage loans in areas designated by the corporation, such

loans to be made on a sound economic basis by the application of sound

mortgage lending principles.

2. It is not the intention or the purpose of the powers herein granted

to take from banking or insurance organizations any such loans or

commitments as may be desired by such organizations generally in the

ordinary course of their business; provided however, that the

corporation need not make any specific inquiry or find as a fact that

any banking or insurance organization desires to make any such loan.

3. In furtherance of the purpose set forth in subdivision one of this

section, and in addition to the powers conferred on stock corporations

by general laws, the corporation shall, subject to the restrictions and

limitations contained in this article, have the following powers:

(a) To issue and sell for cash capital stock of the corporation.

(b) To issue and sell its debentures bearing such interest rates and

having such maturities and other terms and provisions as may be

determined by the board of directors of the corporation.

(c) To invest in bonds and mortgages or notes and mortgages upon

improved and unencumbered real property in areas in this state

designated by the board of directors of the corporation as blighted,

over-crowded, or deteriorating areas, subject to the following

conditions:

(i) The board of directors shall be satisfied with respect to each

loan that it is economically sound.

(ii) No such loan shall be in an amount in excess of eighty per centum

of the corporation's appraised value of such real property, except that

such loan may exceed eighty per centum when guaranteed or insured by the

federal government or any agency thereof.

(iii) Any appraisal of such property shall be based on its long-term

economic value with due consideration being given, among other factors,

to its physical maintenance and, in the case of income-producing

properties, to its stabilized rental value after adequate vacancy

allowances. Except in cases of new construction no appraisal of an

income-producing property shall be undertaken by the corporation unless

it has first been supplied by the loan applicant with a current rent

roll and statement of income and expense for the twelve-month period

preceding the date of the loan application, certified by such loan

applicant and in form and substance satisfactory to the corporation.

(iv) No loan shall be made on any existing housing accommodation

unless (a) such housing accommodation is in physical condition

satisfactory to the corporation or (b) the loan applicant is committed

to restore such housing accommodation to satisfactory condition prior to

the loan closing, or, at the discretion of the corporation, within a

specified period after closing, out of the proceeds of the loan.

(v) No loan shall be made on a housing accommodation unless (a) such

housing accommodation has a suitable heating system satisfactory to the

corporation, or (b) the loan applicant is committed to install suitable

heating facilities out of the proceeds of such loan.

(vi) Any such loan shall be for one or more of the following purposes

only:

A. To finance the improvement or rehabilitation of an existing housing

accommodation.

B. To consolidate, refinance or liquidate existing mortgage

indebtedness on a housing accommodation.

C. To finance the bona fide purchase of a housing accommodation,

provided that except in cases of loans insured or guaranteed by the

federal government or any agency thereof, the purchaser of the real

property which is to constitute the security for the proposed loan has

paid to the seller in cash an amount equal to at least twenty per centum

of the purchase price of such real property.

D. To finance the construction of new housing accommodations.

(vii) The board of directors of the corporation shall cause to be

included in each mortgage the following protective provisions and

restrictions (in addition to those contained in the statutory form M

mortgage with lien covenant as contained in section two hundred

fifty-eight of the real property law), provided that any and all of the

said provisions and restrictions may be waived by the corporation where

the corporation is purchasing or otherwise acquiring an already existing

mortgage:

A. A provision requiring the mortgagor to obtain the prior written

consent of the holder of the first mortgage to the creation of any

junior liens, charges or encumbrances affecting the real property. In

its sole and absolute discretion the corporation may modify or waive the

inclusion of this provision in any mortgage.

B. A provision requiring the mortgagor to accumulate and maintain with

the holder of the first mortgage, so long as the mortgage is held by it,

a fund for the proper repair and maintenance of the mortgaged premises.

The amount and type of such fund and conditions under which it shall be

accumulated, applied and replenished shall be specified in the mortgage.

Such fund may be applied from time to time to the repair or maintenance

of the property by the mortgagor with the written consent of the holder

of the first mortgage. Such fund shall be applied by the mortgagor at

the direction of such holder, when such application is deemed necessary

by such holder for the reasonable protection of the property. In its

sole and absolute discretion the corporation may waive the inclusion of

this provision in any mortgage.

C. A provision permitting the mortgagor to repay the principal amount

of the loan or any part thereof at any time without penalty, except that

the mortgage may, in the discretion of the board of directors, contain a

provision for a prepayment penalty not exceeding two per centum of any

amount repaid within three years after the closing of the loan in

addition to such regular repayments without penalty as may be provided

in the mortgage.

(viii) No loan shall be made by the corporation unless the real

property which is to secure such loan is, or upon application of the

loan proceeds will be, unencumbered, and the corporation shall have been

furnished with satisfactory evidence that such real property is or upon

application of the loan proceeds will be in compliance with all

applicable laws, ordinances and regulations of governments, whether

federal, state, county or municipal, or agencies or instrumentalities

thereof, having jurisdiction.

(ix) Such other and further conditions as the board of directors in

its sole and absolute discretion may deem advisable in the interest of

conducting the affairs of the corporation in accordance with sound

economic and mortgage lending principles.

(x) The mortgage shall provide that violation of any of the foregoing

conditions by the mortgagor shall constitute an event of default,

entitling the holder of the first mortgage to accelerate maturity of the

mortgage obligation.

(xi) The mortgage shall provide for maturity of the loan and

amortization thereof at such rate as shall be deemed appropriate by the

board of directors in accordance with sound mortgage lending practice,

provided that except in cases of loans insured or guaranteed by the

federal government or any agency thereof, no mortgage shall have a

maturity in excess of twenty years from the date of closing.

(xii) The enumeration herein, or in any lending rules or regulations

promulgated by the corporation, of conditions or criteria relating to

the granting of any mortgage loan shall impose no obligation on the

corporation to grant any application for a loan which fulfills such

conditions or criteria. The authority of the corporation to decline any

loan application for any reason whatsoever shall be absolute and

unconditional.

(xiii) Nothing contained in this article shall be construed as

signifying a legislative intent to define what constitutes prudent

lending practice for banking, insurance or other organizations.

(d) To sell without recourse bonds and mortgages or notes and

mortgages acquired pursuant to subdivision three (c) of this section, at

such prices and upon such terms and conditions as the board of directors

of the corporation shall determine; to service or continue to service

such bonds and mortgages and to manage such properties for any of its

members, provided that if the purchaser be a member, the said bond and

mortgage or note and mortgage is in all respects eligible for investment

by the particular member purchasing the same.

(e) To acquire, subscribe for, own, hold, sell, assign, transfer,

pledge or otherwise dispose of obligations of the United States with

maturities not in excess of three years.

(f) For the purpose of protecting its interests, to release any

obligation to pay or guarantee the payment of principal or interest, or

otherwise to waive or modify any of the terms and conditions of any bond

and mortgage, and of any note and mortgage, and to extend or re-extend

any bond and mortgage, and any note and mortgage, and to accept a sum

less than the principal amount thereof in the full payment and

satisfaction of the same.

(g) In addition to interest rates within legal limits the corporation

may impose a service charge upon the mortgagor or owner which shall not

exceed two per centum of the total amount of the loan.

(h) To apply for status as an approved mortgagee under the national

housing act and to act as a mortgagee under said act.

4. The corporation shall have the power to purchase, receive, hold,

lease or otherwise acquire, and to sell, convey, mortgage, lease, pledge

or otherwise dispose of, upon such terms and conditions as its board of

directors may deem advisable, real and personal property, together with

such rights and privileges as may be incidental and appurtenant thereto

and the use thereof, including, but not restricted to, any real or

personal property acquired by such corporation, from time to time in the

satisfaction of debts or enforcement of obligations, provided that the

corporation may purchase or acquire only the following real estate:

(a) Plots whereon there are or may be erected buildings suitable for

the convenient transaction of the business of the corporation.

(b) Such real property as shall be conveyed to it in satisfaction of

debts previously contracted in the course of its business.

(c) Such real estate as it shall purchase at sales under judgments,

decrees or mortgages held by it.

(d) In lieu of instituting an action to foreclose a mortgage lien, the

corporation may purchase a deed to the underlying real property.

§ 305 — Board of directors

Board of directors. 1. All the corporate powers of such

corporation shall be exercised by a board of directors consisting of

thirteen persons, all of whom shall be of full age, citizens of the

United States and at least seven of whom shall be residents of the

state.

2. At the first annual meeting of such corporation and at each annual

meeting thereafter the members shall elect ten directors whose term of

office shall be one year.

Each of the members entitled to vote for directors pursuant to this

subdivision two of section three hundred five of this article shall be

entitled to one vote for each twenty-five thousand dollars, or major

fraction thereof, it is subject to be called upon to advance to the

corporation pursuant to the provisions of section three hundred seven of

this article.

3. At such first and succeeding annual meetings the stockholders of

such corporation shall elect three additional directors for terms of one

year each.

4. If any director shall lose his citizenship, or shall cease to be a

resident of the state, thereby creating a vacancy, or if a vacancy

occurs in the membership of the board of directors through death,

resignation or otherwise, the remaining directors shall elect a person

to fill such vacancy for the unexpired term.

5. The board of directors shall elect one of its members as chairman

of such board, shall adopt by-laws for such corporation, and may appoint

such officers and employees as it deems advisable.

6. In addition to other matters, the by-laws of such corporation may

contain specific standards and criteria by which mortgage applications

will be judged and loans made in so far as such specific standards and

criteria are not inconsistent with any of the provisions of this

article.

§ 306 — Temporary board of directors

Temporary board of directors. 1. The first annual meeting of

such corporation shall be held at a time and place to be fixed by the

temporary board of directors which shall be as soon as reasonably

possible after a minimum of two and one-half per centum of the capital

stock of such corporation shall have been paid into its treasury and a

minimum of ten members of such corporation shall have qualified as

hereinafter provided, and such meeting shall be called in such manner as

may be provided by the temporary board of directors.

2. Notwithstanding the foregoing provisions of this section, until the

first annual meeting of such corporation and the election and

qualifications of a board of directors as hereinabove provided, all the

corporate powers of such corporation shall be exercised by a temporary

board of directors consisting of thirteen persons, all of whom shall be

of full age, citizens of the United States and residents of this state,

and who shall be designated by the governor. Such designation shall be

in writing, signed by the officer making it, and transmitted by him to

the secretary of state who shall make and record in his office a copy of

such designation and deliver the original to the designee, who, if he

accepts such designation, shall notify the secretary of state of such

fact, in writing, and thereupon his designation shall become effective

and the secretary of state shall record such acceptance in his office.

If any vacancy occurs in such temporary board of directors through

death, resignation or otherwise, a person shall be designated to fill

such vacancy by the governor. Upon the election and qualification of a

board of directors pursuant to section three hundred five of this

article, the temporary board of directors shall be deemed dissolved.

3. As soon as possible after the designation of the directors

comprising the temporary board has become effective, the temporary board

of directors shall meet, elect a chairman, cause stock certificates to

be printed, appoint temporary officers and seek to enlist the support,

membership and stock subscription of institutional lenders.

§ 307 — Membership

Membership. 1. The members of such corporation shall consist of

such banking organizations, insurance and surety companies, as may make

application for membership in such corporation, and membership shall

become effective upon the acceptance of such applications by the

temporary board of directors or the permanent board of directors, as the

case may be. Each member shall lend funds to the corporation as and when

called upon by it to do so, pursuant to subdivision two of this section,

but the total amount on loan by any member at any one time shall not

exceed the following limits to be determined as of the date it became a

member, and such amount shall thereafter be readjusted annually in the

event of any change in the base of the loan limit of such member:

commercial banks, industrial banks and trust companies, one per centum

of capital and surplus; private bankers, one per centum of capital;

savings banks, one per centum of surplus fund; savings and loan

associations, one per centum of surplus; stock insurance companies, one

per centum of capital and surplus; surety and casualty companies, one

per centum of capital and surplus; mutual insurance companies, one per

centum of guaranty funds or of surplus, whichever is applicable; and

comparable limits for other banking, lending and insurance

organizations, as established by the board of directors; provided,

however, that the total amount on loan by any member at any one time

shall not exceed two hundred fifty thousand dollars; provided, however,

that in the case of banking organizations and in the case of insurance

and surety companies the superintendent of financial services may

authorize a member to lend to the corporation an amount in excess of two

hundred fifty thousand dollars. All loan limits shall be established at

the thousand dollar nearest to the amount computed on an actual basis.

All calls of funds which members are committed to lend to such

corporation shall be prorated by such corporation among the members in

the same proportion that the maximum loan limit of each bears to the

aggregate loan limits of all members of such corporation. Upon six

months' prior written notice to the board of directors, a member of such

corporation may withdraw from membership, effective at the end of such

six-month period and, after the effective date of such withdrawal, such

member shall be free of obligations hereunder except those accrued or

committed by such corporation prior to such effective date of

withdrawal. Notwithstanding the provisions of any other law, general or

special, the notes or other interest-bearing obligations of such

corporation, issued in accordance with and by virtue of this article and

the by-laws of such corporation, shall be legal investments for the

banking, insurance and surety organizations who become members of such

corporations, up to but in no event exceeding the loan limits

established herein.

2. The board of directors of the corporation may, on thirty days'

written notice to its members, make a call of all or any part of the

funds which such members are committed to lend pursuant to subdivision

one of this section. The debentures or evidences of debt of the

corporation issued pursuant to the provisions of this article or by-laws

may contain such terms and provisions as the board of directors of the

corporation shall deem advisable, including, but not limited to

provisions concerning interest rates, maturities, sinking funds,

redemptions and refundings.

§ 308 — Capital and shares

Capital and shares. The total number of shares which the

corporation may issue is forty thousand, all without par value. The

consideration for which such shares may be issued is one hundred dollars

per share in cash. The capital of the corporation shall be at least

equal to the consideration received by the corporation from the issuance

of its shares plus such amounts as, from time to time, by resolution of

the board of directors may be transferred thereto. At least two and

one-half per centum of the authorized shares shall be issued and paid

for before the corporation shall be authorized to transact any business

other than such as relates to its organization.

§ 309 — Obligations

Obligations. At no time shall the total obligations of such

corporation exceed twenty-five million dollars.

§ 310 — Restrictions

Restrictions. Such corporation shall not deposit any of its

funds in any banking organization unless such banking organization has

been designated as a depository by a vote of the majority of all of the

directors of such corporation, exclusive of any director who is an

officer or director of the depository so designated. Such corporation

shall not make any loans other than those set forth in section three

hundred four hereof, and in no event shall the corporation make any

loans, directly or indirectly, to any of its officers or to any firms in

which any of its officers is an officer, director or stockholder. Such

corporation shall not receive money on deposit except that money held in

escrow pursuant to the provisions of subdivision three (c) (vii) B of

section three hundred four hereof, or otherwise, shall not be deemed to

be the receipt of money on deposit.

§ 311 — Examination

Examination. At least once in each calendar year the

corporation shall be examined by the superintendent of financial

services for the purpose of determining the corporation's net worth and

the soundness of its management and operating policies. The corporation

shall not, however, be deemed to be a banking or insurance organization.

The corporation shall pay the cost of each such examination. Copies of

each examination report, including the findings, conclusions and

recommendations of the examiners, shall be furnished to the corporation.

The corporation shall furnish copies of each report, including the

findings, conclusions and recommendations of the examiners, to each of

the holders of its capital stock and to its members. Such corporation

shall make an annual report of its condition to the governor,

legislature and superintendent of financial services on or before

January first of each year.

§ 312 — Unissued securities and reorganization

Unissued securities and reorganization. 1. The holders of

capital stock of such corporation shall not, as such, have any

pre-emptive or preferential right to purchase or subscribe for any part

of the unissued or new issue of capital stock of such corporation,

whether now or hereafter authorized or issued, or to purchase or

subscribe for any bonds or other obligations, whether or not convertible

into stock of such corporation, now or hereafter authorized or issued.

2. Whenever a compromise or arrangement or any plan of reorganization

of such corporation is proposed between such corporation and its

creditors, members or stockholders, the supreme court, by virtue of its

general equity powers, may on application of such corporation or of any

creditor, member or stockholder thereof, or on the application of any

receiver or receivers appointed for such corporation, order a meeting of

such creditors, members or stockholders, as the case may be, as may be

affected by the proposed compromise or arrangement or plan of

reorganization, which shall be called in such manner as the said court

directs. If, at such meeting, such compromise or arrangement or plan of

reorganization is agreed to by or on behalf of the creditors, if

affected thereby, holding two-thirds in amount of the claims against

such corporation, and by or on behalf of the stockholders, if affected

thereby, holding the majority of capital stock, and by or on behalf of

the members, if affected thereby, holding two-thirds in amount of the

outstanding notes or other interest-bearing obligations of such

corporation as provided for in section three hundred seven of this

article, and if such agreement shall be further evidenced by the written

acceptance of said creditors, stockholders and members, duly filed in

the said court, such compromise or arrangement or plan of reorganization

shall, if approved by the said court as just and equitable, be binding

on all creditors, stockholders or members, as the case may be, who are

affected thereby, and also on such corporation. All persons who become

creditors, stockholders or members of such corporation shall be deemed

to have become creditors, stockholders or members subject in all

respects to this section, and the same shall be absolutely binding upon

them. For the purposes of this subdivision only, members shall not be

deemed to be creditors and shall act under this subdivision as a

separate class.

§ 313 — Participation

Participation. Notwithstanding any rule at common law or any

provision of any general or special law or any provision in their

respective charters, agreements of association, articles of organization

or certificates of incorporation:

1. All banking organizations, insurance and surety companies are

hereby authorized to become members of the corporation established by

this article and to make loans to such corporation as provided herein;

2. A banking organization which does not become a member of the

corporation established by this article shall not acquire any shares of

the capital stock of such corporation;

3. Each banking organization, insurance and surety company which

becomes a member of the corporation established by this article is

hereby authorized to acquire, purchase, hold, sell, assign, transfer,

mortgage, pledge, or otherwise dispose of any bonds, securities or other

evidences of indebtedness issued by such corporation or the shares of

its capital stock, and while owners of said stock, to exercise all the

rights, powers and privileges of ownership, including the right to vote

thereon, all without the approval of any regulatory authority of this

state; provided, however, that the amount of the capital stock of such

corporation which may be acquired by any member pursuant to the

authority granted herein, shall not exceed ten per centum of the loan

limit of such member as defined by section three hundred seven of this

article. The amount of capital stock of such corporation which any

member is authorized to acquire pursuant to the authority granted herein

shall be in addition to the amount of capital stock in corporations

which such member may otherwise be authorized to acquire.

ARTICLE 7-A Community Senior Citizens Centers and Services Companies

§ 350 — Short title

Short title. This article shall be known and may be cited and

referred to as the "community senior citizens centers and services

companies law."

§ 351 — Policy and purposes of article

Policy and purposes of article. It is hereby declared that the

provision of new and improved community senior citizens facilities is

necessary to care for the increasing number of persons who are in need

of programs and services for the aging. Such facilities should be

located close to the people they serve and should supplement the

programs and services provided for such persons by the office for the

aging pursuant to title one of article two of the elder law.

It is hereby further declared that non-profit corporations should be

created to construct, acquire, reconstruct, rehabilitate, own and

operate such facilities and that provision should be made for mortgage

loan participation by the New York state housing finance agency in order

to ensure that the full resources of the private enterprise sector of

the economy may be made available for this purpose; that there is a need

for public assistance to such corporations by the granting of tax

exemption; that it is the policy of the state to promote the provision

of senior citizens facilities by such non-profit corporations; and that

such provision is a public use and purpose.

§ 352 — Definitions

Definitions. As used in this article the following words and

phrases shall have the following meanings unless a different meaning is

plainly required by the context:

1. "Company", or "community senior citizens centers and services

company". A company, duly incorporated pursuant to the provisions of the

not-for-profit corporation law and this article, for the purpose of

providing centers for the aging, and such facilities as may be

incidental or appurtenant thereto.

2. "Project" or "community senior citizens services project". A

specific work or improvement, including lands, buildings, improvements,

fixtures and articles of personal property, constructed, acquired,

reconstructed, rehabilitated, managed, owned or operated by a company

pursuant to this article, to provide centers for the aging, including

such facilities as may be incidental or appurtenant thereto.

3. "Project cost" or "community senior citizens services project

cost". The sum total of all costs incurred by a company approved by the

commissioner as reasonable and necessary for carrying out all works and

undertakings and providing all necessary equipment for the development

of a project, less any private or federal, state or local financial

assistance available for and received by the company for the payment of

such project cost. These shall include but are not necessarily limited

to the carrying charges during construction up to and including the

occupancy date, working capital not exceeding three per centum of the

estimated total cost or three per centum of the actual total final cost,

whichever is larger, the cost of all necessary studies, surveys, plans

and specifications, architectural, engineering, legal or other special

services, the cost of acquisition of land and any improvements thereon,

site preparation and development, construction, reconstruction,

rehabilitation, improvement and equipment, including fixtures,

equipment, and articles of personal property required for the operation

of such facilities, the reasonable cost of financing incurred by the

company in the course of the development of the project, up to and

including the occupancy date, the fees imposed by the commissioner and

by the New York state housing finance agency; other fees charged, and

necessary expenses incurred in connection with the initial occupancy of

the project, and the cost of such other items as the commissioner may

determine to be reasonable and necessary for the development of a

project, less any and all rents and other net revenues from the

operation of the real property, improvements or personal property on the

project site, or any part thereof, by the company on and after the date

on which the contract between the company and the New York state housing

finance agency was entered into and prior to the occupancy date.

4. "Occupancy date". The date defined in the document providing for a

mortgage loan between a company and the New York state housing finance

agency.

5. "Commissioner". The commissioner of social services of the state of

New York.

6. "Department". The department of social services of the state of New

York.

§ 353 — Companies; how created

Companies; how created. Notwithstanding the provisions of any

other law or requirement to the contrary, companies shall be

incorporated and organized pursuant to the not-for-profit corporation

law and this article.

In addition to those matters required to be set forth in the

certificate of incorporation by the not-for-profit corporation law, the

certificate shall state:

1. That, among the purposes for which it is formed, the company is to

plan, construct, acquire, alter, reconstruct, rehabilitate, improve,

own, maintain and operate one or more projects pursuant to this article.

2. The number of directors, which shall be not less than three nor

more than fifteen. Directors shall be elected by the members of the

company. One additional director may be designated by the commissioner.

In the absence of fraud or bad faith the director appointed by the

commissioner shall not be personally liable for the debts, obligations

or liabilities of the company.

3. That the real property of the company shall not be sold,

transferred, encumbered or assigned except as permitted by the

provisions of this article.

4. That the company has been organized exclusively to serve a public

purpose and that it shall be and remain subject to the supervision and

control of the department pursuant to the provisions of this article and

all applicable laws and regulations.

5. That all income and earnings of the company shall be used

exclusively for its corporate purposes.

6. That no part of the net income or net earnings of the company shall

inure to the benefit or profit of any private individual, firm or

corporation.

§ 354 — Consent of commissioner

Consent of commissioner. Whenever any such certificate shall be

presented to the secretary of state, he shall not file such certificate

unless there shall accompany the same a certificate of the commissioner

stating that he consents to the filing of such certificate; nor shall

any amendment to the certificate of incorporation be filed unles it is

accompanied by a certificate of the commissioner consenting thereto.

§ 355 — Powers and limitations of a company

Powers and limitations of a company. 1. Except as is

inconsistent with the provisions of this article, a company shall have,

in carrying out the purpose of this article, the powers conferred on

corporations by the not-for-profit corporation law and shall be subject

to the limitations contained therein.

2. Companies shall have the following additional powers:

(a) To make and execute contracts and other instruments necessary or

convenient in the exercise of its powers;

(b) To acquire or contract to acquire from any persons, firm,

corporation, public corporation, municipality, federal or state agency,

by grant, purchase, or otherwise, leaseholds, real, personal or mixed

property or any interest therein, and to sell, assign, exchange,

transfer, mortgage or encumber the same;

(c) To own, hold, clear and improve, leasehold, real, personal or

mixed property or any interest therein;

(d) To issue non-interest bearing debentures up to an amount

representing the difference, if any, between the amount of the mortgage

made by the company and the estimated project cost; and in the event the

final project cost shall exceed the estimated project cost, the

difference between the amount of the mortgage made by the company and

such final project cost;

(e) To construct, reconstruct, rehabilitate, improve, alter, repair,

lease, manage or operate and otherwise provide community senior citizens

services projects;

(f) To insure or provide for the insurance of its property or

operations as required by law and also against such other risks as it

may deem advisable;

(g) To limit by contract the exercise of any of its powers;

(h) To invest any funds held in reserves or sinking funds, or any

funds not required for immediate disbursement in property or securities

in which savings banks may legally invest funds subject to their

control;

(i) To sue and be sued;

(j) To have a seal and alter the same at pleasure;

(k) To make and from time to time amend and repeal by-laws, rules and

regulations not inconsistent with the provisions of this article;

(l) To enter into contracts with the New York state housing finance

agency for mortgage loans and to pay all such fees and charges as may be

imposed by such agency as a condition of such mortgage loan;

(m) To enter into contracts for the rendering of services;

(n) To receive assistance from the state, federal government,

municipalities, or any person, firm or corporation by contract or

otherwise; and to comply, subject to the provisions of this article,

with the terms and conditions of such assistance;

(o) To do all other things necessary or convenient to carry out its

powers.

3. No company shall:

(a) Acquire any real property or interest therein unless such company

shall first have obtained from the commissioner a certificate that such

acquisition is consistent with the purposes of this article;

(b) Issue notes, bonds, debentures, or other obligations in an

aggregate amount greater than project cost;

(c) Without first having obtained the written consent of the

commissioner;

(i) Construct, reconstruct, rehabilitate, improve, alter or repair any

project, or enter into any contract for such purposes;

(ii) Sell, transfer, lease or encumber any real property, except that

no such consent shall be necessary in any sale in foreclosure pursuant

to section three hundred sixty-three;

(iii) Enter into any contracts relating to the management or operation

of senior citizens services projects;

(iv) Enter into any contracts for the payment of any salary, fee or

emolument to officers or employees;

(v) Make a guaranty of payment, or pledge any or all of its assets,

income or revenues to secure payment of its obligations;

(vi) Lease a project or a portion thereof to a third party for the

purposes of operation, such lease to be subject to all the terms,

provisions and limitations of any mortgage loan made by the New York

state housing finance agency relating to such project.

§ 356 — Members; officers and directors

Members; officers and directors. No member or director of a

company shall receive any salary or other compensation for services as

such member or director, other than reimbursement of actual and

necessary expenses incurred in the performance of his duties. No member,

officer, or employee of a company shall acquire any interest, direct or

indirect, in any property then or thereafter included or planned to be

included in a project, nor retain any interest, direct or indirect in

any property acquired subsequent to his appointment or employment which

is later included or planned to be included in a project. If any member,

officer or employee of any company owns or controls an interest, direct

or indirect, in any property included in a project, which was acquired

prior to his appointment or employment, he shall disclose such interest

and the date of acquisition thereof in writing to the company and such

disclosure shall be entered upon the minutes of the company.

§ 357 — Financing

Financing. 1. Any company formed under this article may,

subject to the approval of the commissioner, borrow funds from the New

York state housing finance agency and secure the repayment thereof by

bond or note and mortgage which shall contain such terms and conditions

as may be deemed necessary or desirable by the New York state housing

finance agency or required by any agreement between the New York state

housing finance agency and the holders of its notes and bonds with

respect to such companies, including the right to assignment of rates

and fees and entry into possession in case of default, but the operation

of such project, in the event of such entry, shall be subject to

regulations promulgated by the department.

2. The New York state housing finance agency may make a contract to

make loans to companies not to exceed the total project cost. Any such

loan shall be secured by a first mortgage lien upon all the real

property and improvements of which the project consists and upon all

fixtures and articles of personal property attached to or used in

connection with the construction, acquisition, reconstruction,

rehabilitation, improvement or operation of the project.

3. Any inconsistent provision of law to the contrary notwithstanding,

mortgages of a company shall be exempt from the mortgage recording taxes

imposed by article eleven of the tax law.

4. The provision of community centers for senior citizens and of

programs and services for senior citizens is hereby declared to be a

proper public and municipal purpose for which the moneys of the state

and of its political subdivisions and of all public corporations may be

raised and expended. The state, and each political subdivision of the

state, and each public corporation of the state or a political

subdivision thereof, and individuals, foundations and all other private

organizations and corporations may make capital grants to any company

organized pursuant to this article and such company may accept and

receive the same and apply the same in payment or reduction of the

project cost.

§ 358 — Conditions and security for loans

Conditions and security for loans. No loan shall be made by the

New York state housing finance agency to a company until the

commissioner has approved the project and finds that:

(1) The company has complied with all of the provisions of this

article and all applicable laws and regulations;

(2) There is a need for a project of the type proposed in the area to

be served and that the services and facilities to be provided by the

project are consistent with such need;

(3) The plans and specifications conform to the requirements of all

laws and regulations applicable thereto and assure adequate light, air,

sanitation and fire protection and are satisfactory to him;

(4) The estimated revenue of the project will be sufficient to cover

all probable costs of operation and maintenance, of fixed charges and

such reserves as may be authorized by the commissioner or required by

the New York state housing finance agency;

(5) Provision has been made for the purpose of providing for the

payment of the difference, if any, between the estimated project cost

and the mortgage loan; and in the event the final project cost shall

exceed the estimated project cost, the difference between such final

project cost and the mortgage loan;

(6) Provision has been made for the filing by the company with the

department and the New York state housing finance agency of such

financial statements including an annual report setting forth such

information as the commissioner may require; and

(7) Provision has been made for the examination by the commissioner

and the New York state housing finance agency of the books and records

of the company.

§ 359 — Rates and fees

Rates and fees. A company shall, with the approval of the

commissioner, fix maximum rates and fees to be charged persons served by

each project for the facilities and services provided by the company to

such persons, the average of such rates and fees for any one project not

to exceed the maximum average rates and fees determined by the

commissioner before any commitments are made by the company for the

construction, acquisition, reconstruction, rehabilitation or improvement

of the project. The commissioner upon his own motion, or upon

application by the company or lienholder may vary the amount of such

rates and fees from time to time so as to secure together with all other

income of the company, sufficient income to meet, within reasonable

limits, all necessary payments by the said company of all expenses,

including fixed charges, sinking funds and reserves.

§ 360 — Transfer of real property

Transfer of real property. Notwithstanding any requirement of

law to the contrary or any provision of any general, special or local

law, charter or ordinance, every executor, administrator, trustee,

guardian or other person holding trust funds or acting in a fiduciary

capacity, unless the instrument under which such fiduciary is acting

expressly forbids, and the state, its subdivisions, municipalities, all

other public bodies, all public officers, persons, partnerships and

corporations owning or holding any real property, may grant, sell, lease

or otherwise transfer any such real property or interest therein to a

company and receive and hold any cash, exchanged therefor by such

company and may execute such instruments and do such acts as may be

deemed necessary or desirable by them or it and by the company in

connection with a project or projects and such sale, lease or transfer

may be made without public auction or bidding; provided, however, that

where such real property is within an urban renewal area, the

disposition thereof shall be in accordance with the provisions of

paragraph (d) of subdivision two of section five hundred seven of the

general municipal law.

§ 361 — Supervision and regulation

Supervision and regulation. 1. The department may from time to

time make, alter, amend and repeal rules and regulations for the

supervision, examination, regulation and audit of companies and for

carrying into effect the provisions and purposes of this article, and

each company shall submit an annual report of its operations to the

department and the New York state housing finance agency which may

examine and audit the books and records of the company at any time.

2. The department shall have power to act for and in behalf of the

agency in servicing the mortgage loans of the agency, and to perform

such functions and services in connection with the making, servicing and

collection of such loans as shall be requested by the agency.

3. (a) The department may, with respect to any project of which the

New York state housing finance agency has acquired the fee or otherwise,

enter into an agreement with said agency subject to the approval of the

director of the budget, for the department, as provided in paragraph (b)

hereof, to operate the said project in a manner consistent with the

purposes of this article. In such event, the department shall have the

power to use any available funds to pay all operating expenses and to

comply with all the terms and provisions of the mortgage, as though the

mortgage had not been foreclosed, and to comply with the provisions of

this article.

(b) Subject to the provisions of the agreement with said agency, the

department may contract with any person, firm or corporation which it

deems qualified to operate and manage such project and to perform such

duties and functions as it may deem necessary.

§ 362 — Voluntary dissolution

Voluntary dissolution. At any time after the expiration of ten

years after the occupancy date, a company may be voluntarily dissolved,

with the consent of the commissioner, upon repayment in full of all

obligations under the mortgage and payment of all obligations of the

company, as approved by the commissioner.

§ 363 — Foreclosures and judgments

Foreclosures and judgments. 1. In any foreclosure action the

commissioner shall be made a party defendant. He shall take all steps

necessary to protect the interests of the public therein and no costs

shall be awarded against him or the department. Foreclosures shall not

be decreed unless the court to which application is made shall be

satisfied that the interests of the lienholder or holders cannot be

adequately assured except by the sale of the property. In any such

proceeding, the court shall be authorized to appoint the commissioner as

receiver of the property, or to grant such other and further relief as

may be reasonable and proper.

2. Notwithstanding the foregoing provisions of this section, wherever

it shall appear that the New York state housing finance agency shall

have made a mortgage loan which is a first lien upon any such property,

such New York state housing finance agency shall have all the remedies

available to a mortgagee under the laws of the state of New York, free

from any restrictions contained in this section, except that the

commissioner shall be made a party defendant and he shall take all steps

necessary to protect the interests of the public and no costs shall be

awarded against him or the department.

3. In the event of a judgment against a company in any action not

pertaining to the collection of a mortgage indebtedness, there shall be

no sale of any of the real property of such company except upon sixty

days' written notice to the commissioner and the New York state housing

finance agency. Upon receipt of such notice the commissioner and the

agency shall take such steps as in their judgment may be necessary to

protect the rights of all parties.

§ 364 — Fees and charges

Fees and charges. The department may by regulation establish

and charge to any company such fees and charges for inspection,

regulation, supervision and audit as to the department may appear just

and reasonable in order to recover the costs of performing such

functions.

§ 365 — Separability

Separability. If any clause, sentence, paragraph or part of

this article shall be adjudged by any court of competent jurisdiction to

be invalid, such judgment shall not affect, impair or invalidate the

remainder thereof, but shall be confined in its operation to the clause,

sentence, paragraph, section or part thereof directly involved in the

controversy in which such judgment shall have been rendered.

ARTICLE 8 Loans to Owners of Existing Multiple Dwellings

§ 400 — Policy and purposes of article

Policy and purposes of article. It is hereby declared that

there exists in municipalities in this state a seriously inadequate

supply of safe and sanitary dwelling accommodations for persons and

families of low income; that such shortage constitutes an emergency and

a grave menace to the health, safety, morals, welfare and comfort of

citizens of this state; that there exists in such municipalities a large

number of multiple dwellings which are inadequate, unsafe or insanitary

by reason of the absence of proper heating facilities or by reason of

the necessity for elimination of conditions dangerous to human life or

detrimental to health, including nuisances as defined in section three

hundred nine of the multiple dwelling law, or for other rehabilitation

or improvement and which can be made adequate, safe and sanitary, by the

installation of proper heating facilities or by other rehabilitation,

preservation or improvement or by the elimination of such conditions;

that such installation, rehabilitation, preservation or improvement

cannot readily be provided by the ordinary unaided operation of private

enterprise for occupancy by persons or families of low income without

public aid in the form of low interest loans or grants to owners of such

multiple dwellings for the purpose of such installation, rehabilitation,

preservation or improvement; that the installation of proper heating

facilities in such multiple dwellings or other rehabilitation,

preservation or improvement thereof for occupancy by persons of low

income as defined in this article is a public use and a public purpose

for which public money may be loaned or granted; that such conditions

require the provisions hereinafter enacted; and the necessity in the

public interest for the provisions hereinafter enacted is hereby

declared as a matter of legislative determination.

§ 401 — Definitions

Definitions. As used in this article the following terms shall

mean:

1. a. The term "existing multiple dwelling" shall mean any dwelling

classified as a multiple dwelling pursuant to the multiple dwelling law

including class A and class B multiple dwellings, and in existence on

the date upon which an application for a loan pursuant to this article

is received by the agency.

b. The term "existing multiple dwelling" shall also mean any building

in existence on the date upon which an application for a loan pursuant

to this article is received by the agency and which is intended on such

date to be converted to a class A or class B multiple dwelling.

c. The term "existing multiple dwelling" shall also mean a

not-for-profit institution with sleeping accommodations exclusively for

permanent residential purposes or any building in existence on the date

upon which an application for a loan pursuant to this article is

received by the agency which is intended to be converted to a

not-for-profit institution with sleeping accommodations exclusively for

permanent residential purposes.

2. The term "agency" shall mean any officer, board, commission,

department, or other agency of the municipality, or the authority or any

other public authority, designated by the local legislative body to

carry out the functions vested in the agency under this article or

delegated to the agency by the local legislative body in order to carry

out the purposes and provisions of this article.

3. a. The term "persons or families of low income" shall mean "persons

of low income" or "families of low income" as defined in section two of

this chapter.

b. Notwithstanding the provisions of paragraph a of this subdivision,

the term "persons or families of low income" shall also mean any person

or family who, immediately prior to the date on which a contract for a

loan with respect to an existing multiple dwelling is entered into

pursuant to the provisions of this article, occupies any dwelling unit

in such multiple dwelling and who continuously occupies such unit during

and after completion of central heating or other rehabilitation or

improvement performed pursuant to such contract provided, however, that

any person or family required to remove from any such dwelling unit

because of such installation, rehabilitation or improvement shall, for

the purpose of this section, be deemed to have continuously occupied

such unit and shall have preference in re-entering such multiple

dwelling upon completion of the aforesaid work.

4. The term "occupancy date" shall mean the date defined in the

contract for a loan pursuant to this article between the owner of an

existing multiple dwelling and a municipality as the date upon which

such multiple dwelling is to be deemed ready for occupancy, or if such

term is not defined in such contract, the date of issuance of the

temporary certificate of occupancy.

5. The term "rehabilitation", in addition to any other meaning, shall

include conversion of a class B multiple dwelling or a class A multiple

dwelling used in whole or in part for single room occupancy to a class A

multiple dwelling not used in whole or in part for single room

occupancy. The term "rehabilitation" shall also include the conversion

of any existing building to a class A or class B multiple dwelling.

6. The term "owner" shall mean a person having record or beneficial

title in fee simple to real property or the lessee thereof under a lease

having an unexpired term of at least thirty years.

§ 402 — Loans to owners

Loans to owners. 1. Notwithstanding the provisions of any

general, special or local law, a municipality, by such officer or agency

as determined by its local legislative body, is hereby authorized:

(a) to make or contract to make loans to the owners of existing

multiple dwellings within its territorial limits, subject to the

limitations in subdivision two of this section, in such amounts as may

be required for the installation of proper heating facilities, the

incorporation of climate resiliency improvements, or elimination of

conditions dangerous to human life or detrimental to health, including

nuisances as defined in section three hundred nine of the multiple

dwelling law, or other rehabilitation, preservation or improvement of

such multiple dwellings, and if such owner acquires the multiple

dwelling for the purposes of such rehabilitation, preservation or

improvement or owns the multiple dwelling subject to an outstanding

indebtedness, such loans may be made exclusively for or may include such

amounts as may be required for the cost of such acquisition or for the

refinancing of such outstanding indebtedness, and may make temporary

loans or advances to such owners in anticipation of the permanent

municipal loans for such purposes; and

(b) to make or contract to make grants to any owner described in

paragraph (a) of this subdivision, on the same terms as permitted under

such paragraph for a loan.

1-a. As used in this article, the term "loan" shall include any grant

made by a municipality pursuant to this article, provided, however, that

any provision of this article concerning the repayment or forgiveness

of, or security for, a loan shall not apply to any grant made pursuant

to this article.

2-a. (a) Each permanent loan shall be secured by a bond and mortgage

or note and mortgage upon the multiple dwelling and the land upon which

it is situated, provided that where the multiple dwelling is held in the

condominium form of ownership, such loan shall be secured by a bond and

mortgage or note and mortgage upon the condominium units rehabilitated

or improved with such loan; where the loan is made to an owner who is a

lessee, such loan shall be secured by a leasehold interest in such

property.

(b) Each such bond and mortgage or note and mortgage shall be repaid

over or within a period of forty years, provided that such period may be

extended as the agency may determine necessary to ensure the continued

affordability or economic viability of the multiple dwelling, in such

manner as may be provided in such bond and mortgage or note and mortgage

and contract. Such bond and mortgage or note and mortgage and the

contract in connection with such permanent and temporary loans may

contain such other terms and provisions not inconsistent with the

provisions of this article as the local legislative body or the agency

may deem necessary or desirable to secure repayment of the loan, the

interest thereon and other charges in connection therewith and to carry

out the purposes and provisions of this article, including, but not

limited to, providing that the lien created by such bond and mortgage or

note and mortgage, and, if applicable, any regulatory agreement executed

by the owner and the agency or restrictive covenant approved by such

agency, may be recorded in an equal or subordinate position, or

subsequently made equal or subordinate, to a lien recorded by any

private lender against such multiple dwelling.

2-b. If a loan pursuant to this article is made to a non-profit

company or a housing development fund company which agrees to provide

housing accommodations exclusively for persons and families of low

income, at least thirty percent of whom are referred to it by the

municipality and have prior to their initial occupancy in such

accommodations resided in emergency shelter facilities operated by or on

behalf of the municipality, the agency may provide that the note and

mortgage shall automatically be reduced to zero in five equal annual

decrements commencing on the tenth year after the initial occupancy

date, provided that such accommodations have been owned and operated in

a manner consistent with an agreement with the municipality contained in

such note and mortgage to provide housing for such persons.

3. The bond or note issued by the owner of such multiple dwelling and

the mortgage relating thereto may authorize such owner, with the consent

of the agency, to prepay the principal of the loan subject to such terms

and conditions as therein provided. Such bond or note and mortgage may

contain such other clauses and provisions as the agency shall require.

4. The agency may require the payment of charges by an owner of such

multiple dwelling in consideration for the financing, regulation,

supervision and audit of such loan. Such fees shall be paid into the

treasury of the municipality requiring the charges and shall be paid and

deposited in the general fund of any such municipality.

5. Whenever reference is made in this article to a municipal loan, a

loan by a municipality, a loan from a municipality, a contract for a

loan between a municipality and an owner, or any similar term, with

respect to the territorial limits of the city of New York such terms

shall be construed to refer to a loan made or to be made either by such

municipality or by the New York city housing development corporation,

whichever is applicable.

6. The bond and mortgage or note and mortgage issued by the owner of

any such multiple dwelling may provide that the loan shall be reduced to

zero commencing on the fifteenth year after the execution of the bond

and mortgage or note and mortgage, provided that, as of the date of any

such reduction, the multiple dwelling has been and continues to be owned

and operated in a manner consistent with a regulatory agreement with the

municipality. Notwithstanding such provision as contained in the bond

and mortgage or note and mortgage, the loan shall be reduced to zero

only if, prior to or simultaneously with delivery of such bond and

mortgage or note and mortgage, the agency made a written determination

that such reduction would be necessary to ensure the continued

affordability or economic viability of the multiple dwelling. Such

written determination shall document the basis upon which the loan was

determined to be eligible for evaporation.

§ 403 — Occupancy

Occupancy. 1. The dwelling units in any existing multiple

dwelling aided by a loan pursuant to this article shall be available

solely for persons or families of low income during the period in which

any part of such loan remains unpaid, any exemption and abatement from

taxation on the property resulting from the installations, alterations

or improvements made with such loan remains in effect or for a period of

at least ten years from the occupancy date, whichever is the later.

2. Any person or family in occupancy whose income precludes the

inclusion of such person or family within the definition provided in

paragraph a of subdivision three of section four hundred one of this

article may be required to pay a rental surcharge in accordance with a

schedule of surcharges to be promulgated by the agency. In determining

imposition of any such surcharge, the agency shall consider factors such

as the net operating income and debt service coverage ratio of the

property aided by a loan pursuant to this article. Rental surcharges

collected pursuant to this section shall be paid by the owner to the

municipality which has granted such owner tax exemption or tax abatement

pursuant to any law authorizing the granting of same, as reimbursement

to such municipality therefor. In the event that such tax exemption and

tax abatement have not been granted, or in the event that a sum equal to

the total amount of tax exemption and tax abatement granted to the owner

has been paid to the municipality, the excess, if any, of surcharges

shall be paid to the municipality in reduction of the loan.

§ 404 — Conditions precedent to making such loans

Conditions precedent to making such loans. 1. No such loan

shall be made by a municipality to an owner of an existing multiple

dwelling unless the owner of such multiple dwelling shall covenant in

writing that so long as any part of such loan remains unpaid, any

exemption and abatement from taxation on the property resulting from the

installations, alterations or improvements made with such loan remains

in effect or for a period of at least ten years from the occupancy date,

whichever is the later:

(a) Each dwelling unit in such multiple dwelling shall be available

solely for persons or families of low income;

(b) Preference shall be given to persons who shall have lived in such

multiple dwelling at the time the contract for the loan was entered into

and were required to move because of such installation, rehabilitation

or improvement;

(c) No charge or rental for housing accommodations in such multiple

dwelling shall be made or charged in excess of the rentals prescribed

pursuant to this article;

(d) The agency may order such repairs as will preserve the health and

safety of the occupants of such multiple dwelling;

(e) All persons operating or managing such multiple dwelling will

comply with the provisions of this article and the rules and regulations

adopted by the agency pertaining to multiple dwellings aided hereunder

and will refrain from doing any acts in violation thereof;

(f) All such persons will permit the duly authorized officers,

employees, agents or inspectors of the agency to enter in or upon and

inspect such multiple dwelling at all reasonable hours;

(g) The agency shall have full power to investigate into and order the

owner of said multiple dwelling to furnish such reports and information

as the agency may require concerning the planning and construction of

the installation, rehabilitation or improvement and the management and

operation of said multiple dwelling. The agency shall also have full

power to audit the books of such owner with respect to such matters;

(h) The foregoing covenants shall run with the land.

2. The local legislative body of the municipality or the agency shall

have power to impose additional terms and conditions precedent to making

such loans.

§ 405 — Rent control; tax exemption

Rent control; tax exemption. 1. Notwithstanding the provisions

of, or any regulations promulgated pursuant to, the emergency housing

rent control law, the local emergency housing rent control act or local

law enacted pursuant thereto: (1) housing accommodations in any multiple

dwelling aided by a loan pursuant to this article shall have maximum

rents prescribed in accordance with and shall be fully subject to the

provisions of said laws and regulations during the life of the loan or

during any period in which any exemption and abatement from taxation on

the property resulting from the installations, alterations or

improvements made with such loan remain in effect or for a period of at

least ten years from the occupancy date, whichever is later; (2) upon

payment of the loan or the expiration of the said tax exemption and tax

abatement or of the said ten year period, whichever is later, housing

accommodations in any such multiple dwelling shall, upon application, be

decontrolled, unless immediately prior to such payment or expiration the

rents of such housing accommodations would have been controlled by the

provisions of said laws and regulations, other than pursuant to this

article, in which event such housing accommodations shall continue

subject to the provisions of said laws and regulations to the same

extent and in the same manner as if this article had never applied to

such accommodations; (3) should the provisions of said laws and

regulations expire while any loan made pursuant to this article remains

unpaid or before the expiration of the said tax exemption and tax

abatement or of the said ten year period, whichever is later, then

housing accommodations in multiple dwellings aided by such loans shall

be subject to control by the agency to the same extent and in the same

manner as they were subject to control by the temporary state housing

rent commission or by the city housing rent agency created pursuant to

the local emergency housing rent control act. However, the maximum rent

for any such housing accommodations shall be the rent last established

by the said rent commission or by the said city housing rent agency

subject to adjustment by the agency pursuant to the provisions of this

article and regulations of the agency promulgated pursuant thereto and

(4) should the provisions of said laws and regulations not be applicable

in a municipality prior to the making of a loan pursuant to this

article, then rents in housing accommodations in multiple dwellings

aided by such loans shall be subject to regulation by the agency in a

manner calculated to assure compliance with the policy and purposes of

this article.

1-a. Notwithstanding the provisions of subdivision one of this

section, and subject to the provisions of subdivision twenty of section

six hundred fifty-four of this chapter, where the housing accommodations

in any multiple dwelling are aided pursuant to this article by a loan

made by the New York city housing development corporation, maximum rents

during the life of such loan shall be prescribed by the agency and the

rental rate may be varied by the agency from time to time upon

application by the owner or by the New York city housing development

corporation so as to secure, together with all other income from such

property, sufficient income to meet within reasonable limits, all

necessary payments to be made by the owner of all expenses including

fixed charges, sinking funds, reserves and dividends.

* 1-b. Notwithstanding the provisions of subdivision one of this

section, where the housing accommodations in any multiple dwelling are

aided by a loan pursuant to this article made by the municipality on or

after September first, nineteen hundred eighty-four, and provided that

such housing accommodations were vacant at the time of the making of the

loan, maximum rents during the life of such loan shall be prescribed by

the agency and the rental rate may be varied by the agency from time to

time upon application by the owner or by the agency so as to secure,

together with all other income from such property, sufficient income to

meet within reasonable limits, all necessary payments to be made by the

owner of all expenses, including fixed charges, sinking funds, reserves

and dividends.

* NB Effective until July 1, 2027

* 1-b. Notwithstanding the provisions of subdivision one of this

section, where the housing accommodations in any multiple dwelling are

aided by a loan pursuant to this article made by the municipality on or

after September first, nineteen hundred eighty-four, and provided that

such housing accommodations were vacant at the time of the making of the

loan, maximum rents during the life of such loan shall be prescribed by

the agency and the rental rate may be varied by the agency from time to

time upon application by the owner or by the agency so as to secure,

together with all other income from such property, sufficient income to

meet within reasonable limits, all necessary payments to be made by the

owner of all expenses, including fixed charges, sinking funds, reserves

and dividends.

* NB Effective July 1, 2027

* 1-c. Except with respect to dwelling accommodations subject to

subdivision one-a or one-b of this section, notwithstanding the

provisions of subdivision one of this section or any regulation

promulgated pursuant to the emergency housing rent control law, the

local emergency housing rent control act, the emergency tenant

protection act of nineteen seventy-four, or any local law enacted

pursuant thereto, upon completion of the rehabilitation of a multiple

dwelling which is aided by a loan pursuant to this article made by the

municipality on or after September first, nineteen hundred eighty-six,

the agency shall establish the initial rent for each rental dwelling

unit within the multiple dwelling. All dwelling units within the

multiple dwelling subsequent to establishment of initial rents by the

agency shall be subject to the rent stabilization law of nineteen

hundred sixty-nine. The occupant in possession of such a dwelling unit

when it is made subject to the rent stabilization law of nineteen

hundred sixty-nine shall be offered a choice of a one or two year lease

at the initial rents established by the agency notwithstanding any

contrary provisions of, or regulations adopted pursuant to, the rent

stabilization law of nineteen hundred sixty-nine and the emergency

tenant protection act of nineteen seventy-four. The agency shall cause

all tenants in occupancy of each dwelling unit affected by the

provisions of this section to be notified of and have an opportunity to

comment on the contemplated rehabilitation. Such notification shall

advise such tenants of the approximate expected rent increase and the

subsequent availability of a one or two year lease. Such notification

and opportunity to comment shall be provided before the rehabilitation

and again after the construction is completed and before the

establishment of the initial rents.

* NB Expires July 1, 2027

2. The municipality may, by local law, provide for exemption from

taxation of any increase in valuation resulting from the installation,

alterations or improvements performed with the aid of such loans or for

abatement of taxation on such property, including the land, or for both

such exemption and abatement, to the same extent, for the same period,

and under the same terms and conditions as such exemption or abatement,

or both, may be provided by local law enacted under the terms of any

currently effective statute authorizing the granting of tax exemption or

tax abatement, or both, in aid of the rehabilitation, alteration or

improvement of multiple dwellings or the elimination of unhealthful or

dangerous conditions therein. Notwithstanding any contrary provisions of

any general, special or local law, a property aided by a loan pursuant

to this article shall not be ineligible for tax exemption or tax

abatement or both, as provided by local law enacted pursuant to statute,

solely because such property is not subject to control of rents under

the emergency housing rent control law or local law enacted pursuant to

the local emergency housing rent control act, but such tax exemption and

tax abatement shall terminate if and when such property is subject to

control of rents neither under the emergency housing rent control law,

local law enacted pursuant to the local emergency housing rent control

act or this article.

§ 406 — Rules and regulations

Rules and regulations. An agency may promulgate supplementary

rules and regulations to carry out the provisions of this article, not

inconsistent with the provisions of this article.

§ 407 — Participation by certain corporations and individuals

Participation by certain corporations and individuals. 1. One

or more banking institutions, foundations, labor unions, employers'

associations, veterans' organizations, insurance companies, trustees,

fiduciaries or any combination of the foregoing, shall have the power to

participate and invest, singly or jointly, with a municipality or the

New York city housing development corporation in a bond or note and

single participating mortgage, or in separate bonds or notes and

mortgages pursuant to and in accordance with the provisions of this

article. As used in this section, the terms "trustees" and "fiduciaries"

shall include any fiduciary or fiduciaries holding funds for investment.

2. Banking institutions and insurance companies may exercise such

power on such conditions as may be prescribed or authorized by the

superintendent of financial services.

3. Where one or more banking institutions, foundations, labor unions,

employers' associations, veterans' organizations, insurance companies,

trustees or fiduciaries participates and invests with a municipality or

the New York city housing development corporation as provided in

subdivision one, the interest of each need not be equal as to priority

of lien, interest rate, time or rate of amortization or otherwise.

4. Where a municipality joins with one or more corporations

organizations or individuals of the kind hereinabove mentioned in making

a loan secured by a single participating mortgage or by separate

mortgages, the municipality may make provision, either in the mortgage

or mortgages or by separate agreement, for the performance of such

services as are generally performed by a banking institution or

insurance company which itself owns and holds a mortgage or by a trustee

under a trust mortgage. The agency is hereby authorized to act as

trustee or to consent to the appointment of a banking institution to act

in such capacity.

§ 408 — Minimization of displacement

* § 408. Minimization of displacement. The agency shall use its best

efforts to ensure that activities carried out pursuant to this article

are structured so as to minimize the likelihood of any involuntary

physical or economic displacement of tenants who reside in multiple

dwellings which are the subject of such activities, other than

temporarily, as a direct result of rehabilitation work which is

performed in such multiple dwelling in which case suitable temporary

relocation arrangements shall be provided.

* NB Expires July 1, 2027

ARTICLE 8-A Small Loans to Owners of Multiple Dwellings to Remove Substandard or Insanitary Conditions

§ 450 — Policy and purposes of article

Policy and purposes of article. It is hereby declared that

there exists in municipalities in this state a seriously inadequate

supply of safe and sanitary dwelling accommodations; that such shortage

constitutes an emergency and a grave menace to the health, safety,

morals, welfare and comfort of citizens of this state; that existing

conditions of deterioration of housing marked by noncompliance with the

multiple dwelling law or local housing codes threaten a further decrease

in such supply; that rehabilitation and improvement of dwellings to

prolong the useful life of such dwellings may be necessary to arrest

such conditions of deterioration; that the elimination of such

conditions by rehabilitation or other improvement cannot readily be

provided by the ordinary unaided operation of private enterprise without

public aid in the form of low interest loans or grants to owners of such

multiple dwellings; that such rehabilitation or other improvement of

such dwellings to bring them into conformance with the multiple dwelling

law and local housing codes is a public use, a public purpose and a city

purpose for which public money may be loaned or granted by a

municipality and for which indebtedness may be contracted by a

municipality; that such conditions require the provisions hereinafter

enacted, and the necessity in the public interest for the provisions

hereinafter enacted is hereby declared as a matter of legislative

determination.

§ 451 — Definitions

Definitions. As used in this article the following terms shall

mean:

1. "Existing multiple dwelling." Any dwelling classified as a multiple

dwelling pursuant to the multiple dwelling law and in existence on the

date upon which an application for a loan pursuant to this article is

received by the municipality. For purposes of this article an existing

multiple dwelling shall be deemed to include any garden-type maisonette

dwelling project consisting of a series of dwelling units which together

and in their aggregate were arranged or designed to provide three or

more apartments and are provided as a group collectively with all

essential services such as, but not limited to, water supply, house

sewers and heat, and which are in existence and operated as a unit under

single ownership on the date upon which an application for a loan

pursuant to this article is received by the municipality,

notwithstanding that certificates of occupancy were issued for portions

thereof as private dwellings.

2. "Occupancy by persons of low income." Occupancy by "persons of low

income" or "families of low income," as such terms are defined in

section two of this chapter.

3. "Owner." An individual, partnership, corporation or other entity,

including a non-profit company, a mutual company, or a housing

development fund company, which holds record or beneficial title in fee

simple to the multiple dwelling and the real property upon which it is

situate or the lessee thereof under a lease the unexpired term of which

shall be not less than the term of the loan to be made under this

article.

4. "Federal grant funds." Any grants received from the United States

of America for community development activities or for the

rehabilitation or conservation of multiple dwellings.

§ 452 — Loans to owners

Loans to owners. 1. Notwithstanding the provisions of any

general, special or local law, a municipality is hereby authorized:

(a) to make or contract to make loans to the owners of existing

multiple dwellings within its territorial limits, subject to the

limitations in subdivision two of this section, for the elimination of

any substandard or insanitary condition or conditions in violation of

the multiple dwelling law or local housing code, for the incorporation

of climate resiliency improvements or for such replacement and

rehabilitation of the heating, plumbing, electrical and related systems

or other improvements as shall be reasonably necessary to prolong the

useful life of such dwellings, and may make temporary loans to such

owners in anticipation of the permanent municipal loans for such

purposes; and

(b) to make or contract to make grants to any owner described in

paragraph (a) of this subdivision, on the same terms as permitted under

such paragraph for a loan.

1-a. As used in this article, the term "loan" shall include any grant

made by a municipality pursuant to this article, provided, however, that

provisions of this article concerning the repayment or forgiveness of,

or security for, a loan shall not apply to any grant made pursuant to

this article.

2. Each loan shall be evidenced by a note executed by the owner of the

existing multiple dwelling. The supervising agency in its discretion may

require one or more of the shareholders of a corporate owner to co-sign

such note or to otherwise guarantee or pledge security for the repayment

of the loan. Each such note shall be repaid within a period of forty

years, provided that such period may be extended as the supervising

agency may determine necessary to ensure the continued affordability or

economic viability of the existing multiple dwelling. The repayment

shall be made in such manner as may be provided in such note and

contract, if any, in connection with such loan and may authorize such

owner, with the consent of the supervising agency, to prepay the

principal of the loan subject to such terms and conditions as therein

provided. Such note and contract may contain such other terms and

provisions not inconsistent with the provisions of this article as the

local legislative body or supervising agency may deem necessary or

desirable to secure repayment of the loan, the interest thereon and

other charges in connection therewith and to carry out the purposes and

provisions of this article, including but not limited to provisions

ensuring availability of rents for such repayment and provisions

permitting the lien created by such note and mortgage, and, if

applicable, a regulatory agreement executed by such owner and

supervising agency, be recorded in an equal and subordinate position, or

subsequently made equal or subordinate, to a lien recorded by any

private lender against such multiple dwelling.

3. The supervising agency in its discretion may require that the owner

execute a financing statement for real property improvement to be in

such form as the agency shall specify and to contain the following

information: the name and mailing address of the owner, the address of

the real property, a statement that a loan has been made by the

municipality under this article, the amount and duration thereof and the

applicable interest rate. Said financing statement shall be filed

without charge in the office for recording mortgages of real property

and from the date of such filing the municipality shall have a lien

against said real property for the amount advanced or so much thereof as

remains unpaid and interest thereon. If a financing statement is filed

as herein provided, the rights and remedies of the municipality and the

priority of its lien shall be the same as those of a holder of a lien

for the materials furnished or labor performed in the improvement of

real property pursuant to articles two and three of the lien law, except

that the lien shall be valid for one year after the maturity date of the

final installment payable under said note and thereafter as provided in

section seventeen of the lien law. Upon payment of all sums advanced by

the municipality and interest thereon and upon demand of the then record

owner of the real property, the agency shall deliver to him a copy of

the financing statement with an endorsement thereon that the lien is

satisfied; upon filing of such copy in the office where the financing

statement was filed and upon payment of the proper fee therefor, the

lien of such financing statement shall be discharged.

4. The supervising agency may require the owner to execute a mortgage

as security for a loan in lieu of a financing statement as provided in

the foregoing subsection three. Such mortgage shall contain such terms

and provisions not inconsistent with the provisions of this article as

the supervising agency shall deem necessary or desirable to secure

repayment of the loan under this article.

5. The supervising agency may require the payment of charges by the

owner of such existing multiple dwelling in consideration for the

financing, regulation, supervision and audit of such loan. Such charges

shall be paid into the treasury of the municipality requiring the

charges and shall be paid and deposited in the general fund of any such

municipality.

6. In the case of a loan made pursuant to this article, the

supervising agency may pay any liens and charges the priority of which

is superior to its mortgage and may pay such other expenses as may be

appropriate to protect its loan or to protect the lien of the mortgage

relating thereto, provided that such expenditures shall not exceed the

total amount of such loan.

* 7. Notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, the emergency tenant protection act of

nineteen seventy-four, or any local law enacted pursuant thereto, upon

completion of the rehabilitation of a multiple dwelling which is aided

by a loan made pursuant to this article, the supervising agency, may as

an alternative to permissible rental adjustments under such laws and

regulations, adjust the rent for each rental dwelling unit within the

multiple dwelling. The initial rental adjustment, if set by the

supervising agency, shall be established based solely on the debt

service attributable to the loan, provided, that the supervising agency

may establish rental adjustments less than such debt service, provided

further that the supervising agency may establish greater rental

adjustments for vacant dwelling units than for occupied dwelling units.

The supervising agency shall cause all tenants in occupancy of each

dwelling unit affected by the provisions of this subdivision to be

notified of and have an opportunity to comment on contemplated

rehabilitation. Such notification shall advise such tenants of the

approximate expected rent increase. Such notification and opportunity to

comment shall be provided before the rehabilitation and again after the

construction is completed and before the establishment of the rental

adjustment.

* NB Expires July 1, 2027

* 8. Notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, the emergency tenant protection act of

nineteen seventy-four, or any local law enacted pursuant thereto, upon

completion of the rehabilitation of a class B multiple dwelling, class A

multiple dwelling used for single room occupancy purposes, lodging house

or a substantially vacant building intended to be used after

rehabilitation for single room occupancy purposes and which is aided by

a loan pursuant to this article made by the municipality on or after

September first, nineteen hundred eighty-five, the agency shall

establish the initial rent for each rental dwelling unit within the

multiple dwelling. All dwelling units within the multiple dwelling

subsequent to establishment of initial rents by the agency shall be

subject to the rent stabilization law of nineteen hundred sixty-nine.

The occupant in possession of such a dwelling unit when it is made

subject to the rent stabilization law of nineteen hundred sixty-nine

shall be offered a choice of a one or two year lease at the initial

rents established by the agency notwithstanding any contrary provisions

of, or regulations adopted pursuant to, the rent stabilization law of

nineteen hundred sixty-nine and the emergency tenant protection act of

nineteen seventy-four. The agency shall cause all tenants in occupancy

of each dwelling unit affected by the provisions of this subdivision to

be notified of and have an opportunity to comment on the contemplated

rehabilitation. Such notification shall advise such tenants of the

approximate expected rent increase and the subsequent availability of a

one or two year lease. Such notification and opportunity to comment

shall be provided before the rehabilitation and again after the

construction is completed and before the establishment of the initial

rents.

* NB Expires July 1, 2027

9. The note or note and contract issued by the owner of any such

multiple dwelling to secure such loan may provide that the loan shall be

reduced to zero commencing on the fifteenth year after the execution of

the note or note and contract, provided that, as of the date of such

reduction, the multiple dwelling has been and continues to be owned and

operated in a manner consistent with a regulatory agreement with the

municipality. Notwithstanding such provision as contained in the note or

note and contract, the loan shall be reduced to zero only if, prior to

or simultaneously with delivery of such note or note and contract, the

agency made a written determination that such reduction would be

necessary to ensure the continued affordability or economic viability of

the multiple dwelling. Such written determination shall document the

basis upon which the loan was determined to be eligible for evaporation.

§ 453 — Conditions precedent to making such loans

Conditions precedent to making such loans. No such loan shall

be made by a municipality to an owner of an existing multiple dwelling

unless the owner of such multiple dwelling shall covenant in writing

that so long as any part of such loan shall remain unpaid or for a

period of at least ten years from the date of the loan, whichever is

later:

1. Each dwelling unit in such multiple dwelling shall be available

solely for occupancy by persons of low income;

2. No person who lives in such multiple dwelling at the time the loan

is made shall be required to move because of the rehabilitation or

improvement financed thereby, except that a temporary relocation may be

required in connection with such rehabilitation or improvement;

3. All persons operating or managing such multiple dwelling will

permit the duly authorized officers, employees, agents or inspectors of

the municipality to enter in or upon and inspect such multiple dwelling

at all reasonable hours;

4. The municipality by such duly authorized representatives as

aforesaid shall have full power to investigate into and order the owner

of such multiple dwelling to furnish such reports and information as it

may require concerning such rehabilitation or improvement and shall have

full power to audit the books of said owner with respect to such

matters; and

5. The owner will submit to the supervising agency annually a

statement of the income and expenses of such multiple dwelling, in such

form as shall be approved by such agency.

§ 454 — Servicing of municipal loans by banking institutions

Servicing of municipal loans by banking institutions. The

municipality is authorized to make provision, either in the loan

agreement or by separate agreement, for the performance by one or more

banking institutions of such services as are generally performed by any

such bank itself owning and holding such a loan and as may be approved

by the superintendent of financial services, for which services a bank

may make and collect such service charges as the superintendent shall

prescribe or approve.

§ 455 — Rules and regulations

Rules and regulations. The supervising agency may promulgate

supplementary rules and regulations to carry out the provisions of this

article, not inconsistent with the provisions of this article.

§ 456 — Minimization of displacement

* § 456. Minimization of displacement. The supervising agency shall

use its best efforts to ensure that activities carried out pursuant to

subdivisions seven and eight of section four hundred fifty-two of this

article are structured so as to minimize the likelihood of any

involuntary economic displacement of tenants who reside in multiple

dwellings which are the subject of such activities. However, if

temporary physical displacement is required as a direct result of

rehabilitation work which is performed in such multiple dwelling

receiving a loan pursuant to this article suitable temporary relocation

arrangements shall be provided.

* NB Expires July 1, 2027

§ 457 — Records

* § 457. Records. The supervising agency shall take reasonable steps

to determine and maintain a record of tenants economically displaced by

virtue of the exercise of powers granted pursuant to subdivisions seven

and eight of section four hundred fifty-two of this article.

* NB Expires July 1, 2027

ARTICLE 8-B Loans to Owners of One to Four Unit Private and Multiple Dwellings

§ 470 — Policy and purposes of article

Policy and purposes of article. It is hereby declared and found

that there exists in municipalities within the state substandard and

unsanitary areas and neighborhoods containing deteriorated one to four

unit private and multiple dwellings, and that the rehabilitation or

preservation of such dwellings is necessary in order to aid in the

prevention and elimination of slums and blight in such areas and

neighborhoods.

It further is found that there exists in such municipalities a

seriously inadequate supply of safe and sanitary one to four unit

private and multiple dwellings, particularly for persons of low and

moderate income, that existing non-compliance with local housing codes

and with the multiple dwelling law and the multiple residence law

threatens to decrease such supply, and that the rehabilitation,

preservation and improvement of such dwellings is necessary to arrest

such conditions of deterioration.

It further is found that the elimination of such conditions by

rehabilitation or other improvements in one to four unit private and

multiple dwellings cannot be readily provided without public aid in the

form of low interest loans or grants to owners of such one to four unit

dwellings.

The rehabilitation, preservation or other improvement of such private

and multiple dwellings is hereby declared a public purpose and a

municipal purpose for which public monies may be loaned or granted.

In order, further, to promote the preservation and rehabilitation of

such dwellings, it is hereby declared that additional provisions should

be made to provide public monies for interest reduction subsidies for

private loans made by private investors for such rehabilitation.

The necessity in the public interest for the provisions of this

article is hereby declared as a matter of legislative determination.

§ 471 — Definitions

Definitions. 1. "Agency" shall mean any agency or

instrumentality of a municipality that is created by legislation and

designated by the chief executive to act on behalf of the municipality

with regard to the provisions of this article.

2. "Banking organization" shall mean any corporation, association or

organization organized under the banking laws of New York state or the

United States which is authorized to transact business in this state.

3. "Existing multiple dwelling" shall mean any dwelling classified as

a multiple dwelling pursuant to the multiple dwelling law or the

multiple residence law and in existence on the date upon which an

application for a loan pursuant to this article is received by the

agency.

4. "Existing private dwelling" shall mean any dwelling classified as a

private dwelling pursuant to the multiple dwelling law or the multiple

residence law and in existence on the date upon which an application for

a loan pursuant to this article is received by the agency.

5. "Federal grant funds" shall mean any grants received from the

federal government for community development activities or for the

rehabilitation or conservation of private or multiple dwellings.

6. "Low and moderate income persons" shall mean persons and families

who cannot afford to improve their homes by relying upon the ordinary

unaided operation of private enterprise.

7. "Municipality" shall mean any city, town or village.

8. "Owner" shall mean an individual or individuals, a partnership, a

corporation or other entity, including but not limited to, a trust, a

joint tenancy, tenancy in common or tenancy by the entirety holding

record or beneficial title in fee simple to an existing private or

multiple dwelling and the real property upon which it is situated, or

the lessee thereof under a lease having an unexpired term of at least

thirty years. "Owner" shall be deemed to also include a cooperative

corporation or a condominium association.

9. Reserved.

10. "Private investor" shall mean one or more banking organizations,

foundations, public benefit corporations, labor unions, credit unions,

employers' associations, veterans' organizations, colleges,

universities, educational institutions, child care institutions,

hospitals, medical research institutes, insurance companies, trustees or

fiduciaries, trustees of pension and retirement funds and systems,

corporations, partnerships, individuals or other entities or any

combination of the foregoing, and shall include the United States of

America and any of its agencies and departments.

11. "Rehabilitation" shall mean the installation, replacement, or

repair of heating, plumbing, electrical and related systems or the

elimination of conditions dangerous to human life or detrimental to

health, including nuisances as defined in local housing or health codes

or as defined in section three hundred nine of the multiple dwelling

law, or in section three hundred five of the multiple residence law, or

other rehabilitation or general property and energy conservation

improvements.

12. "State grant funds" shall mean any grants received from the state

or any public benefit corporation for community development activities

or for the rehabilitation or conservation of private or multiple

dwellings.

§ 472 — Loans to owners

Loans to owners. 1. Notwithstanding the provisions of any

general, special or local law, a municipality, acting through an agency,

is authorized:

(a) to make, or contract to make, loans to owners of one to four unit

existing private or multiple dwellings within its territorial limits,

subject to the limitation of subdivisions two through seven of this

section, in such amounts as shall be required for the rehabilitation,

improvement or acquisition of such dwellings provided, that any such

rehabilitation or improvement may include climate resiliency

improvements. Such loans may also be made exclusively for or include the

refinancing of the outstanding indebtedness of such dwellings, and the

municipality may make temporary loans or advances to such owners in

anticipation of permanent loans for such purposes; and

(b) to make or contract to make grants to any owner described in

paragraph (a) of this subdivision, on the same terms as permitted under

such paragraph for a loan.

1-a. As used in this article, the term "loan" shall include any grant

made by a municipality pursuant to this article, provided, however, that

provisions of this article concerning the repayment or forgiveness of,

or security for, a loan shall not apply to any grant made pursuant to

this article.

2. Each loan shall be evidenced by a note executed by the owner of the

existing dwelling. Repayment of each such note shall be within a period

of forty years, provided that such period may be extended as the agency

may determine necessary to ensure the continued affordability or

economic viability of the existing dwelling. The repayment shall be made

in such manner as may be provided in such note and contract, if any, in

connection with such loan, and may authorize such owner, with the

consent of the agency, to prepay the principal of the loan subject to

such terms and conditions as therein provided. In order to make any such

loan affordable to the owner, the agency may provide in such note and

contract that all of the outstanding principal of said loan may be

self-liquidated over a period of not less than fifteen years of

continuous compliance by the owner with a regulatory agreement or other

restrictive covenant with or approved by the agency and upon the

satisfaction of any additional conditions specified therein. Such note

and contract may contain such other terms and provisions not

inconsistent with the provisions of this article as the agency may deem

necessary or desirable to secure repayment of the loan, the interest

thereon, if any, and other charges in connection therewith, and to carry

out the purposes and provisions of this article, including, but not

limited to, providing that the lien created by the note and mortgage,

and, if applicable, any regulatory agreement executed by such owner and

agency, or restrictive covenant approved by such agency, may be recorded

in an equal or subordinate position, or subsequently made equal or

subordinate, to a lien recorded by any private lender against such

existing dwelling.

3. The agency in its discretion may require that the owner execute,

acknowledge and deliver a uniform commercial code financing statement

for the real property improvement to be in such form as the agency shall

specify and in accordance with the requirements of section 9--502 of the

uniform commercial code of the state of New York. Said financing

statement shall be filed or recorded without charge in accordance with

the provisions of paragraph one of subsection (a) of section 9--501 of

the uniform commercial code, and from the date of such filing the

municipality shall have a lien against said real property improvement

for the amount advanced or so much thereof as remains unpaid together

with the interest thereon. Upon payment of all sums advanced by the

municipality and interest thereon, and upon demand of the then record

owner of the real property, the agency shall deliver a copy of the

financing statement with an endorsement thereon that the lien is

satisfied. Upon filing of such copy in the office where the financing

statement was filed and upon payment of the proper fee therefor, the

lien of such financing statement shall be discharged.

4. The agency may require the owner to execute a mortgage as security

for a loan in lieu of or in addition to a financing statement as

provided in subdivision three of this section. Such mortgage shall

contain such terms and provisions not inconsistent with the provisions

of this article as the agency shall deem necessary or desirable to

secure repayment of the loan.

5. Loans may be made with respect to a one to four unit private or

multiple dwelling encumbered by mortgages, provided no mortgage is in

default, except if such default shall be remedied by the proposed

rehabilitation or improvement.

6. The agency may require the payment of charges by the owner of such

existing private or multiple dwelling in consideration for the

financing, regulation, supervision and audit of such loan. Such charges

shall be paid into the treasury of the municipality requiring the

charges and shall be paid and deposited in the general fund of any such

municipality.

7. In making a loan under this article, an agency shall have the power

to participate in a loan made by any private investor The agency may

enter into an agreement with a private investor to deposit funds with

such private investor to cover the agency's participation in loans to

owners of one to four unit existing private and multiple dwellings with

such funds advanced by such private investor to owners of existing

dwellings. The portion of the loan funded by the agency may be equal to

or subordinate in lien to the portion of the loan funded by the private

investor and the note and contract may contain such terms with respect

to interest rate, if any, and time of payment of principal and interest

as determined by the agency. The agency may make provision, either in

the mortgage or mortgages or by separate agreement, for the performance

by the private investor of such services as are generally performed by a

banking institution which itself holds a mortgage, including, without

limitation, construction loan advances, construction supervision,

initiation of foreclosure proceedings, procurement of insurance, and all

other matters in connection with the financing, supervision, regulation

and audit of any such loan. In order to make the loan affordable to the

owner, the agency may provide an interest reduction subsidy pursuant to

section four hundred seventy-five of this article, or may provide that

all or part of the agency's portion of the outstanding principal of any

such participation loan may be self-liquidated over a period of not less

than fifteen years of continuous compliance by the owner with a

regulatory agreement or other restrictive covenant with or approved by

the agency and upon the satisfaction of any additional conditions

specified therein.

§ 473 — Conditions precedent to making such loans

Conditions precedent to making such loans. 1. No such loan

shall be made to an owner of an existing private or multiple dwelling

unless the owner of such private or multiple dwelling shall covenant in

writing that so long as any part of such loan shall remain unpaid or any

requirement imposed as a condition for making such loan that survives

the repayment of such loan, including, but not limited to, in a

regulatory agreement executed by such owner and the agency or a

restrictive covenant approved by such agency, remains in effect: (i) the

owner or managing agent or operator of such dwelling shall permit the

duly authorized officers, employees, agents or inspectors of the agency

to enter in or upon and inspect such private or multiple dwelling at all

reasonable hours; (ii) the agency by such duly authorized

representatives as aforesaid shall have full power to investigate into

and order the owner of such dwelling to furnish such reports and

information as it may require concerning such rehabilitation or

improvement and shall have full power to audit the books of said owner

with respect to such matters; and (iii) if the property to be

rehabilitated is a multiple dwelling, the owner will submit to the

agency annually a statement of income and expenses of such dwelling, in

such form as shall be approved by the agency.

2. A municipality shall neither make nor participate in a loan to an

owner of an existing private or multiple dwelling pursuant to this

article unless the agency finds that (i) the area in which such dwelling

is situated is a blighted, deteriorated or deteriorating area or has a

blighting influence on the surrounding area, or is in danger of becoming

a slum or a blighted area because of the existence of substandard,

unsanitary, deteriorating or deteriorated conditions, an aged housing

stock, or other factors indicating an inability of the private sector to

cause such rehabilitation to be made; or (ii) the owner of such private

or multiple dwelling is a person or family of low income.

3. The agency shall have the power to impose additional terms and

conditions precedent to make such loans.

§ 474 — Servicing of loans by banking institutions and loan servicing companies

Servicing of loans by banking institutions and loan servicing

companies. 1. The agency is authorized to make provision in the note and

loan agreement or by separate agreement for the performance by one or

more banking institutions of such services as are generally performed by

any such bank itself owning and holding such a loan and as may be

approved by the superintendent of financial services for which services

a bank may make and collect such service charges as the superintendent

shall prescribe or approve.

2. The agency is authorized to make provision in the note and loan

agreement or by separate agreement for the servicing of such loans by a

loan servicing company or other qualified entity, as determined by the

agency, and such services may include, but not be limited to, the

collection of the debt services on such loans and the establishment,

administration, and distribution of an escrow account for the payment of

the owner's real estate taxes, sewer and water rents and fire insurance.

§ 475 — Interest reduction subsidies

Interest reduction subsidies. Notwithstanding the provisions of

any general, special or local law, a municipality, acting through an

agency, is authorized to provide, or contract to provide, interest

reduction subsidies for loans made by private investors to owners of one

to four unit existing private or multiple dwellings within its

territorial limits, if such owners would have been eligible under the

provisions of this article for a loan made by the municipality pursuant

to this article.

§ 476 — Mortgage recording tax exemption

Mortgage recording tax exemption. Notwithstanding any

inconsistent provision of law, mortgages to secure a loan made pursuant

to the provisions of this article shall be exempt from the mortgage

recording taxes imposed by article eleven of the tax law.

§ 477 — Rules and regulations

Rules and regulations. The agency may promulgate rules and

regulations to carry out the provisions of this article.

§ 478 — Source of funds

Source of funds. A municipality may utilize federal grant

funds, state grant funds or any municipal funds to make loans and to

provide interest reduction subsidies pursuant to this article.

ARTICLE 9 Acquisition of Property

§ 500 — Acquisition of real property

Acquisition of real property. Real property may be acquired by

a housing company, a limited-profit housing company or by a municipality

for a housing company or a limited-profit housing company, by gift,

grant, devise, purchase, condemnation or otherwise.

§ 501 — Proceedings to acquire

Proceedings to acquire. 1. A housing company or a

limited-profit housing company electing to acquire through a

municipality, may petition the municipality to institute proceedings

under any applicable general, special or local law, to acquire property

described in the petition for a project. The resolution granting the

petition shall set forth the amount to be paid by the housing company or

limited-profit housing company to the municipality for such property or

in lieu thereof that the housing company or limited-profit housing

company shall pay to the municipality all sums expended or required to

be expended by the municipality in the acquisition thereof, and the time

of payment and manner of securing payment thereof, and may require that

the municipality shall receive, before proceeding with the acquisition

of such property, such assurances as to payment or reimbursement by the

housing company or limited-profit housing company or otherwise as the

municipality may deem advisable. Upon the passage of a resolution by the

local legislative body of the municipality granting the petition, the

housing company or limited-profit housing company shall cause two copies

of surveys or maps of the property described in the petition to be made,

one of which shall be filed in the office of the housing company or

limited-profit housing company, one in the office of the corporation

counsel or chief law officer of the municipality. The filing of such

copies of surveys or maps shall be conclusive evidence of the acceptance

by the housing company or limited-profit housing company of the terms

and conditions of such resolution. The municipality may proceed in

accordance with the provisions of the eminent domain procedure law. When

title to the property shall have vested in the municipality, it shall

convey the same to the housing company or limited-profit housing company

upon payment by the housing company or limited-profit housing company of

the sums and the giving of the security required by the resolution

granting the petition. As soon as title shall have vested in the

municipality, the housing company or limited-profit housing company may,

upon the authorization of the mayor, enter upon the property taken, take

over and dispose of existing improvements, and carry out the terms of

the project with respect thereto. Whenever in connection with

acquisition proceedings, requirement is made in any applicable general,

special or local law for the performance of an act by a department or

officer of the municipality, it shall be regarded for the purposes of

this section as compliance therewith if with the approval of the mayor

such act is performed by the housing company or limited-profit housing

company or by persons specially designated by it.

2. In any proceedings for the assessment of compensation and damages

for property taken or to be taken by condemnation by or for a housing

company or limited-profit housing company, the following provisions

shall be applicable:

(a) Evidence of the price and other terms upon any sale or the rent

received or reserved, whichever is less, and other terms upon any

option, lease or tenancy relating to any of the property taken or to be

taken or to any similar property in the vicinity when the option, sale

or lease was given, occurred or the tenancy existed, within a reasonable

time of the trial, shall be admissible on direct examination. At any

stage of the proceeding, the court or tribunal may require such prior

notice to be given of an intention to introduce evidence as to the sale,

option, leasing or tenancy of property other than the property directly

involved in the proceeding and of particulars relating thereto as it may

deem necessary to prevent surprise.

(b) The deposition of any person, whether or not a party, may be taken

in the manner provided by article thirty-one of the civil practice law

and rules, and the provisions of this section. Such deposition may be

taken upon any question or issue in the proceeding, including the facts

as to any sale, option, lease or tenancy admissible in evidence pursuant

to this subdivision. The deposition may be taken at the instance of the

housing company or limited-profit housing company, the municipality or

of any owner or at the direction of the court, at any time during the

pendency of the action or proceeding. At least five days' notice, or if

service is through the mails, at least eight days' notice, shall be

given of the taking of the testimony, if on the part of an owner, to the

housing company or limited-profit housing company and to all other

owners who have appeared in the proceeding; if by the housing company or

limited-profit housing company or a municipality, to all owners who have

appeared in the proceeding.

(c) Any time during the pendency of such action or proceedings, a

housing company or limited-profit housing company, municipality or an

owner may apply to the court for an order directing an owner or the

housing company or limited-profit housing company or the municipality,

as the case may be, to show cause why further proceedings should not be

expedited, and the court may upon such application make an order

requiring that the hearings proceed and that any other steps be taken

with all possible expedition.

(d) For the purposes of this article, the award of compensation shall

not be increased by reason of any increase in the value of the property

caused by the clearance, reconstruction or proposed clearance or

reconstruction for the purposes of this chapter of the property or of

the area in which the property is situated. No allowance shall be made

for improvements begun on property after notice to the owner of such

property of the institution of the proceedings to condemn such property.

(e) Evidence shall be admissible bearing upon the insanitary, unsafe

or substandard condition of the premises, or the illegal use thereof, or

the enhancement of rentals from such illegal use, and such evidence may

be considered in fixing the compensation to be paid, notwithstanding

that no steps to remedy or abate such conditions have been taken by the

department or officers having jurisdiction. If a violation order is on

file against the premises in any such department, it shall constitute

prima facie evidence of the existence of the condition specified in such

order.

(f) If any of the property included within the project is devoted to a

public use, it may nevertheless be acquired provided that no property

belonging to the municipality or to any government may be acquired

without its consent, and no property belonging to a public utility

corporation may be acquired without the approval of the commission or

other officer or tribunal having regulatory power over such corporation.

(g) Upon the trial, evidence of the price and other terms upon a sale

or assignment or of a contract for the sale or assignment of a mortgage,

award, proposed award, transfer of a tax lien or lien of a judgment

relating to property taken, shall be relevant, material and competent,

upon the issue of value or damage and shall be admissible on direct

examination.

(h) Upon the trial a statement, affidavit, deposition, report,

transcript of testimony in an action or proceeding, or appraisal made or

given by any owner or prior owner of the premises taken, or by any

person on his behalf, to any court, governmental bureau, department or

agency respecting the value of the property for tax purposes, shall be

relevant, material and competent upon the issue of value or damage and

shall be admissible on direct examination.

(i) The term "owner," as used in this section, shall include a person

having an estate, interest or easement in the property to be acquired or

a lien, charge or encumbrance thereon.

3. The term "housing company", as used in this section, shall include

a housing development fund company organized pursuant to the provisions

of article eleven of this chapter.

§ 502 — Condemnation of excess property

Condemnation of excess property. A municipality may take

private property for a limited-profit housing company by condemnation

for the purpose of providing low rent housing for families of low

income, or for the clearance, replanning, reconstruction and

rehabilitation of areas, or for both of such purposes, and for

recreational and other facilities incidental or appurtenant thereto, but

in excess of that required for public use after such purposes shall have

been accomplished. A municipality or a limited-profit housing company

may improve and utilize such excess property wholly or partly for any

other public purpose, or may lease or sell such excess property with

restrictions to preserve and protect the project or projects.

Proceedings to acquire such excess property may be brought by the

municipality for a limited-profit housing company in the same manner as

for the real property required for the project and may be included in

the proceedings for the acquisition of real property required for the

project.

§ 503 — Sale or lease of municipal lands to a housing company

Sale or lease of municipal lands to a housing company. 1. The

local legislative body of a municipality, by resolution, may determine

that real property of the municipality, specified and described in such

resolution is not required for use by the municipality and may authorize

the municipality to sell or lease such real property to a housing

company.

2. Notwithstanding the provisions of any general, special or local law

or ordinance, such sale or lease may be made without appraisal, public

notice or public bidding for such price or rental and upon such terms

(and, in case of a lease, for such term not exceeding fifty years with a

right to one renewal term of thirty years) as may be agreed upon between

the municipality and the housing company.

3. Before any sale or lease to a housing company shall be authorized,

a public hearing shall be held by the local legislative body to consider

the proposed sale or lease.

4. Notice of such hearing shall be published at least ten days before

the date set for the hearing in such publication and in such manner as

may be designated by the local legislative body.

5. The deed or lease of such property shall be executed in the same

manner as a deed or lease by the municipality for other real property

and shall contain appropriate conditions and provisions to enable the

municipality to re-enter the property in the event of a violation by the

housing company of any of the provisions of this chapter relating to

such company or of the conditions or provisions of such deed or lease.

6. A housing company purchasing or leasing land from a municipality,

shall not, without the written approval of the municipality, use such

land for any purpose except in connection with a project approved under

this chapter. The deed shall contain a condition that the company will

devote the land granted only for the purposes of a project, subject to

the restrictions of this chapter for breach of which the municipality

shall have the right to re-enter and repossess itself of the land.

§ 504 — Re-entry of lands sold or leased

Re-entry of lands sold or leased. 1. After the expiration of

one year from the sale or lease of real property by the municipality to

a housing company, the municipality shall have the right of re-entry in

the manner hereinafter provided. Such right of re-entry may, where the

property has been sold, be exercised at any time prior to twenty years

after such sale, or where the property has been leased, at any time

prior to the termination of the lease. The local legislative body may

by resolution determine to re-enter the real property of any housing

company which has purchased or leased property from the municipality.

2. A certified copy of such resolution shall be filed in the office of

the county clerk or register in which the deed or lease of such property

is recorded, and shall be served upon the housing company and also upon

all obligees, mortgagees or holders of liens upon the real property or

upon any interest therein. Upon the filing of such resolution all

indebtedness of the housing company shall become immediately due and

payable.

3. The municipality shall, within ninety days after the filing of the

resolution to re-enter, or as soon thereafter as may be feasible, pay to

the company a sum which, together with the assets of such company, shall

be sufficient to discharge all the indebtedness of the company, pay the

reasonable expenses of liquidation and dissolution and return to the

holders of stock and debentures then outstanding, the par value thereof

plus interest at the rate of six per centum per annum and any accrued

and unpaid dividends or interest on such outstanding stock and

debentures.

4. Upon the making of such payment the housing company shall deliver

to the municipality proper instruments evidencing the cancellation of

the indebtedness and the surrender of the rights of the company and

thereupon the repossession by the municipality shall be complete.

5. In the event of a foreclosure of a mortgage or other lien held by

any other person, bodies, institutions, associations, or corporations

specified in section eighty-one the right of re-entry by the

municipality shall terminate upon the entry of a judgment of foreclosure

and sale.

§ 507 — Condemnation certificate of commissioner

Condemnation certificate of commissioner. The power of

condemnation shall not be exercised by a housing company, except with

the authorization of such action by the commissioner, which

authorization shall be in the form of a certificate declaring that the

acquisition of the property is necessary for the construction of a

project and that the acquisition is in the public interest and necessary

for the public use. Such certificate shall be issued only after a public

hearing. The certificate shall state the nature of the interest to be

acquired.

§ 508 — Notice of public hearing

Notice of public hearing. The hearing shall be held at a time

and place appointed by the commissioner who shall give notice of such

hearing by publication in a newspaper, designated by him, published or

circulated in the municipality or county wherein the property is

located, at least ten days prior to such hearing. Where a municipality

publishes an official daily publication, notice of hearing shall be

published only in such official publication. A duly certified copy of

such certificate shall be conclusive evidence as to the matters lawfully

certified therein in any proceeding to acquire property, or any part

thereof, set forth in such certificate.

ARTICLE 10 Sale or Lease of Projects

§ 550 — Application of article

Application of article. This article shall apply only to

federal, state or municipal projects purchased or leased from

municipalities or housing authorities by housing companies. Except as

otherwise expressly provided in this article, the terms and provisions

of this chapter and other applicable laws shall apply to projects sold

or leased to housing companies and to housing companies acquiring such

projects.

§ 551 — Definitions

Definitions. As used in this article, the following terms shall

mean and include:

1. "Cost of acquisition." In the case of a project purchased from an

authority or municipality, the cost of acquisition shall include the

purchase price, costs incidental to the transfer of title, and the

estimated cost, if any, of necessary alterations and repairs to be

performed within six months after transfer of title to the housing

company. Such cost of acquisition shall, in the case of a limited

dividend or state-aided limited-profit housing company, be determined

and certified by the commissioner; in the case of a municipally-aided

housing company, it shall be determined and certified by the supervising

agency.

In the case of a project leased from a municipality or authority, the

cost of acquisition shall be the value of the lease to the company, as

determined and certified by the commissioner in the case of a limited

dividend or state-aided limited-profit housing company, or by the

supervising agency, in the case of a municipally-aided limited-profit

housing company.

2. "Housing company." A limited dividend or limited profit housing

company organized pursuant to the provisions of article four or article

two of this chapter.

3. "Project." A specific work or improvement, including lands,

buildings and improvements acquired, owned, constructed, managed or

operated by an authority or a municipality to provide dwelling

accommodations for persons of low income.

§ 552 — Sale or lease of projects

Sale or lease of projects. 1. An authority or a municipality

may grant, sell, lease or convey a project, or part thereof, either

prior to, at the date of, or subsequent to the physical completion

thereof, to a housing company, without public bidding, public sale or

public offering, and a housing company may accept, purchase, lease or

otherwise acquire such project or part thereof upon such terms and

conditions as may be agreed upon by such authority or municipality and

such housing company, and provided that such sale or lease and the terms

and conditions thereof shall be subject (a) in the case of a

federally-aided project, to the approval of the federal government; (b)

in the case of a state-aided project, to the approval of the

commissioner; or (c) in the case of municipally-aided project, to the

approval of the supervising agency and the local legislative body. In

the event of a grant, sale, lease or conveyance of a project prior to

the physical completion thereof, the authority or municipality may agree

to complete construction and development of such project.

2. The purchase price to be paid on or prior to the date of transfer

of title, or upon the physical completion of the project, shall not be

less than the amount required by the municipality or authority to pay

and retire, or to make provision for the payment and retirement of, all

bonds, notes and other obligations issued by the municipality or

authority to finance the project cost.

3. An authority or a municipality which has granted, sold, leased or

conveyed a project or part thereof to a housing company may reenter all

or part of such project in the manner provided in section five hundred

four of this chapter.

4. The sale or lease of a project to a housing company may be

conditioned on the inclusion in the certificate of incorporation of such

housing company of a provision that no dividends or interest be paid on

all or any issues of stock or debentures.

5. The parties to any lease or conveyance effecting the transfer of a

publicly-assisted project to a housing company, executed prior to the

effective date hereof, may amend such lease or conveyance in accordance

with the provisions of this article.

§ 553 — Conditions precedent to sale or lease

Conditions precedent to sale or lease. No such grant, sale,

lease or conveyance under this article shall be made unless (1) the

authority or municipality, after a public hearing on ten days published

notice, and with the approval of the government providing the financial

assistance, shall find that such transfer is in the best public

interest, (2) adequate provision will be made for tenant relocation, and

(3) adequate provision will be made for the payment or retirement of all

bonds, notes and other obligations issued by the municipality or

authority to finance the project cost.

§ 554 — Provisions of lease

Provisions of lease. 1. Every lease of a project or a part

thereof to a housing company:

(a) shall provide that all improvements shall be the property of the

lessor;

(b) may require that provision be made for the retirement and

surrender of all outstanding shares and debentures upon the termination

of the lease;

(c) may reserve such easements or other rights in connection with the

property as may be deemed necessary or desirable for the future planning

and development of the municipality and the extension of public

facilities therein;

(d) shall contain a provision authorizing the lessor to designate a

director of the housing company; and

(e) may contain such other provisions as are not inconsistent with the

provisions of this chapter.

2. Such lease shall not impose upon the lessor any liability or

obligations in connection with or arising out of the financing,

construction, reconstruction, alteration, management or operation of a

project, but such lease shall contain such provisions as may be

necessary to protect the interests of the authority or municipality.

§ 555 — Financial structure

Financial structure. 1. (a) The entire amount to be paid in

cash or property by the stockholders and income debenture holders of a

housing company acquiring fee title to a project shall be equivalent to

at least twenty per centum of the cost of acquisition of such project as

certified by the commissioner in the case of companies organized

pursuant to the provisions of article four of this chapter, or at least

ten per centum of the cost of acquisition in the case of companies

organized pursuant to the provisions of article two of this chapter, as

certified by the commissioner or supervising agency, as the case may be.

(b) The entire amount to be paid in cash or property by the

stockholders and income debenture holders of a housing company acquiring

a project by lease shall be determined by the commissioner or

supervising agency, as the case may be. In the event a state-aided

project shall be acquired by a municipally-aided company by lease, the

approval of the commissioner shall be required in addition to the

approval of the supervising agency.

2. The provisions of subdivision one hereof shall not be applicable to

any housing company organized pursuant to article four of this chapter

if such company shall receive a loan from the federal government or any

instrumentality thereof, or if any mortgage or mortgage bonds insured by

the federal housing administration are used in financing the project, or

the acquisition thereof, in whole or in part. In such case the equity

required shall be the difference between the amount of such loan or

mortgage and the cost of acquisition.

§ 556 — Tax exemptions

Tax exemptions. Notwithstanding the provisions of section

fifty-two, subdivisions three and four of the public housing law, or of

sections thirty-three or ninety-three of this chapter, the real property

in a project sold or leased as provided in this article, when the

transfer thereunder becomes effective, shall be exempt from local and

municipal taxes, other than assessments for local improvements, only to

such extent as may be granted by the local legislative body of any

municipality in which such project is located; provided, however, that

any company to which such project is so sold or leased shall pay, with

respect to each such project, local and municipal taxes in amounts not

less than the sum or sums which the authority would be obligated to pay

to the municipality had it not sold or leased the project to such

company. The tax exemption shall operate and continue (1) so long as

capital loans of the company to which such project shall have been sold

or leased are outstanding, or in case of lease, so long as obligations

of the municipality or authority to the government granting financial

assistance to the municipality or authority with respect to the project

so leased shall continue and (2) until and unless the project shall be

repossessed by the authority or municipality. Any project that received

a tax exemption under this section may, upon the expiration of the tax

exemption period, be granted an additional tax exemption period of up to

fifty years, or until such time as the project is no longer operated

under the restrictions and for the purposes set forth in this article,

whichever is sooner.

§ 557 — Supervision of certain housing companies

Supervision of certain housing companies. The provisions of

section thirteen of this chapter requiring the approval by the

commissioner of housing of the persons incorporating a limited-profit

housing company, and the provisions of section fourteen of this chapter

requiring the consent of the commissioner of housing to the filing of a

certificate of incorporation of a limited-profit housing company in the

office of the secretary of state and amendments thereof, shall not apply

to a municipally-aided housing company organized for the purpose of

purchasing or leasing a federally-aided project or municipally-aided

project from a municipality or housing authority. The deed or lease

shall, in such cases, make provision for the supervision of such

companies by one or more state, federal or municipal agencies.

§ 558 — Subsidies

Subsidies. 1. The obligation of the state to pay periodic

subsidies to an authority or municipality for a project which has been

leased or sold to a housing company, and the obligation of a

municipality to make subsidies in at least an equal amount, as required

by section seventy-three of the public housing law, shall cease as of

the last day of the fiscal year next after the effective date of the

grant, sale, lease or conveyance.

2. In the event that an authority or municipality which has granted,

sold, leased or conveyed a project to a housing company, for any reason

or in any way resumes possession of such project, the obligations of the

state and municipality to pay subsidies, as provided by the terms of

section seventy-three of the public housing law, shall be deemed

restored as of the first day of the fiscal year next prior to the date

of such resumption of possession of such project.

§ 559 — Savings clause

Savings clause. 1. The repeal of laws as specified in section

five hundred sixty of this article, or amendment of any law as provided

by this act, shall not affect or impair the validity of any action taken

by any public official under the law in effect immediately prior to the

time this article shall take effect nor affect or impair any contract or

remedy or any act done or right accruing, accrued or acquired, or any

penalty, forfeiture or punishment under or by virtue of the laws so

repealed and in existence prior to the time when this article takes

effect, but the same may be asserted, enforced or prosecuted, and for

such purposes all of the laws specified in section five hundred sixty

are hereby continued in full force and effect.

2. This article or anything herein contained shall not affect or abate

any actions, proceedings, civil or criminal, pending at the time when

this article takes effect, brought by, for or against the state, any

municipality, authority, limited dividend or limited-profit housing

company, under or in pursuance of the provisions of the laws repealed or

amended by this article or act; but all such actions or proceedings may

be continued, prosecuted, conducted and completed.

3. If any clause, sentence, paragraph, section or part of this article

shall be adjudged by any court of competent jurisdiction to be invalid,

such judgment shall not affect, impair or invalidate the remainder

thereof, but shall be confined in its operation to the clause, sentence,

paragraph, section or part thereof directly involved in the controversy

in which such judgment shall have been rendered.

4. The provisions of this article shall be construed liberally so as

to facilitate the purposes of this article.

§ 560 — Laws repealed

Laws repealed. Subdivision four of section thirty-seven of the

public housing law, as added by chapter nine hundred fifty-nine of the

laws of nineteen hundred sixty, and section one hundred thirty-two of

such law, as amended by chapter one hundred forty-eight of the laws of

nineteen hundred forty, and section one hundred thirty-three of such law

are hereby repealed.

ARTICLE 11 Housing Development Fund Companies

§ 570 — Short title

Short title. This article shall be known and may be cited and

referred to as the "housing development fund companies law".

§ 571 — Statement of legislative findings and purposes

Statement of legislative findings and purposes. The legislature

hereby finds and declares that there continues to exist in the state a

seriously inadequate supply of safe and sanitary dwelling accommodations

within the financial reach of families and persons of low income. This

condition is contrary to the public interest and threatens the health,

safety, welfare, comfort and security of the people of the state.

The legislature further finds and declares that the ordinary

operations of private enterprise cannot provide an adequate supply of

safe and sanitary dwelling accommodations at rentals which families and

persons of low income can afford.

The legislature further finds that eleemosynary institutions,

settlement houses, fraternal and labor organizations, foundations and

other non-profit associations are desirous of organizing companies to

build or rehabilitate housing for low income families; that in order for

such organizations to build or rehabilitate housing, such organizations

need and can effectively utilize development funds to procure government

aided or other permanent financing therefor.

The legislature further finds that such development funds and the

provision of technical assistance in the organization and management of

housing development fund companies will maximize federal funds and

credits which may be available for the provision of housing for low

income residents of the state.

It is the purpose of this act to provide temporary financial and

technical assistance to enable such companies to participate more

effectively in existing municipal, state and federal assistance programs

and to make more effective use of other sources of financing which may

be available for housing of persons and families of low income.

It is further the purpose of this article to coordinate activities

aided under existing municipal, state and federal programs with other

public and private actions in order to provide the most effective and

economical concentration of federal, state, local, and private efforts

to increase the supply of housing accommodations for persons of low

income, and thereby improve the quality of life for all the people of

the state.

It is further the purpose of this article to provide assistance for

existing not-for-profit housing companies by providing advances from the

housing development fund to facilitate the rehabilitation or

construction of housing for low income families.

It is further the purpose of this article to provide assistance for

the improvement of housing for farmworkers by providing advances to

local loan administrators to make loans to agricultural producers for

the purpose of constructing or improving non-conforming farmworker

housing in order to comply with state regulations relating to such

housing.

§ 572 — Definitions

Definitions. As used in this article, the following terms shall

mean and include:

1. "Commissioner." The commissioner of housing and community renewal

of the state of New York.

2. "Comptroller." The comptroller of the state of New York in the

context of the housing development fund established by section five

hundred seventy-four of this article, or the comptroller or chief fiscal

officer of a municipality in the context of the municipal housing

development fund established pursuant to section five hundred

seventy-four-a of this article, as the case may be.

3. "Development cost." The cost approved by the commissioner or the

supervising agency, as the case may be, as appropriate expenditures

which may be incurred prior to commitment and initial advance of the

proceeds of a mortgage, including but not limited to: (a) payments for

options to purchase properties on the proposed housing project site,

deposits on contracts of purchase, or, with prior approval of the

commissioner or the supervising agency, as the case may be, payments for

the purchase of such properties; (b) legal and organizational expenses,

including payment of attorneys' fees, project manager and clerical staff

salaries, office rent and other incidental expenses; (c) payment of fees

for preliminary feasibility studies, advances for planning, engineering

and architectural work; (d) expenses for tenant or home ownership

surveys and market analyses; (e) necessary application and other fees;

(f) bridge loans which shall mean such interim financing as may be

necessary for the development of residential properties and which shall

be repaid out of equity which may include proceeds from the syndication

of the federal low income housing tax credit as established pursuant to

the federal internal revenue code; and (g) such other expenses incurred

by the housing development fund company or housing corporation as the

commissioner or the supervising agency, as the case may be, may deem

appropriate to effectuate the purposes of this article.

4. "Division." The division of housing and community renewal in the

executive department of the state of New York.

5. "Federally-aided mortgage." A mortgage made or insured by the

federal government or any agency or instrumentality thereof, or a

mortgage loan entered into in conjunction with a housing assistance

payments contract in connection with new construction or substantial

rehabilitation pursuant to section eight of the United States Housing

Act of 1937, as amended.

6. "Fund." The housing development fund created by section five

hundred seventy-four of this article, or a municipal housing development

fund established pursuant to section five hundred seventy-four-a of this

article, as the case may be.

7. "Gross project cost." The sum total of all reasonable and necessary

costs incurred by a housing development fund company for carrying out

all works and undertakings for the development of a housing project.

These shall include but not necessarily be limited to the cost of all

necessary studies, surveys, plans and specifications, architectural,

engineering, legal or other special services, financing, acquisition,

demolition, construction, equipment, and site development of new and

rehabilitated buildings, rehabilitation, reconstruction, repair or

remodeling of existing buildings, and the cost of tenant placement and

tenant relocation services in connection with a project.

8. "Housing project." A specific work or improvement undertaken by a

housing development fund company to provide dwelling accommodations,

including the acquisition, construction and/or rehabilitation of lands,

buildings and improvements, and such commercial, social, recreational,

communal or other non-housing facilities as may be incidental or

appurtenant thereto.

8-a. "State urban development corporation project." A project

acquired, owned, constructed, managed or operated by a housing

development fund company which is a subsidiary of the New York state

urban development corporation, as the term "subsidiary" is defined in

the New York state urban development corporation act.

8-b. "Farmworker housing project." A specific work or improvement that

is undertaken by one or more agricultural producers for the construction

or improvement of dwelling accommodations for farmworkers who are not

family members of the agricultural producers. For the purposes of this

section only, an "agricultural producer" shall mean a person or entity

which owns or operates land eligible for an agricultural assessment

pursuant to section three hundred five or section three hundred six of

the agriculture and markets law and which produces food by the tillage

of the soil, or raises, sheers, feeds or manages animals or other

dairying processes.

9. "Housing development fund company." A company incorporated and

organized pursuant to section five hundred seventy-three of this

chapter.

10. "Local legislative body." In a city, the board of aldermen, common

council, commission, or other board or body now or hereafter vested with

jurisdiction to enact ordinances or local laws, except that if there be,

in a city of one million population or more, a board of estimate, the

term shall mean only such board of estimate; in a town, the town board;

in a village, the board or trustees; in a county, the board of

supervisors.

11. "State-aided mortgage." A loan made by the state of New York or

any agency or instrumentality thereof.

12. "Taxing jurisdiction." Any municipal corporation or district

corporation, including any school district or any special district,

having the power to levy or collect taxes and benefit assessments upon

real property, or in whose behalf such taxes or benefit assessments may

be levied or collected.

13. "Municipally-aided Mortgage." A loan made by a municipality

pursuant to the provisions of article two of this chapter to a mutual

company as defined in section twelve of this chapter or to a non-profit

company incorporated pursuant to the provisions of the not-for-profit

corporation law and article two of this chapter, or a loan made by a

municipality pursuant to the provisions of article eight of this chapter

to a mutual company as defined in section twelve of this chapter or to a

not-for-profit corporation incorporated pursuant to the provisions of

the not-for-profit corporation law and this article or a temporary

construction loan or advance or a permanent loan that the supervising

agency certifies is made pursuant to the provisions of article fifteen

of this chapter to a mutual company as defined in section twelve of this

chapter or to a not-for-profit corporation incorporated pursuant to the

provisions of the not-for-profit corporation law and this article.

14. "Supervising Agency." The comptroller in a municipality having a

comptroller; in a municipality having no comptroller, the chief fiscal

officer of such municipality; except that in the city of New York it

shall be the department of housing preservation and development.

15. "Housing corporation." A not-for-profit or charitable corporation

which has as one of its primary purposes the improvement of housing for

persons of low income, or a wholly owned subsidiary of such corporation

or organization.

16. "Local loan administrator." A farm credit bureau or member of the

farm credit system or a banking institution with a demonstrated ability

to provide financial assistance and service to agricultural producers

that have entered into a master servicing agreement prescribed pursuant

to section five hundred seventy-six-d of this chapter.

§ 573 — Incorporation and organization of non-profit housing corporations

Incorporation and organization of non-profit housing

corporations. 1. A housing development fund company shall be

incorporated pursuant to the provisions of this article and the

provisions of either (a) the business corporations law, (b) the

not-for-profit corporation law, or (c) the not-for-profit corporation

law and article two of this chapter.

2. The term "housing development fund corporation" or "housing

development fund company" shall be included as a part of the corporate

name as set forth in the certificate of incorporation.

3. The certificate of incorporation of any such corporation shall, in

addition to any other requirements of law, provide:

a. that the company has been organized exclusively to develop a

housing project for persons of low income;

b. that all income and earnings of the corporation shall be used

exclusively for corporate purposes, and that no part of the net income

or net earnings of the corporation shall inure to the benefit or profit

of any private individual, firm, corporation or association;

c. that if the corporation receives a temporary loan or advance from

the housing development fund or a municipal housing development fund, as

established by or pursuant to article eleven of the private housing

finance law, it shall be authorized to enter into an agreement with the

commissioner of housing and community renewal of the state of New York

or the supervising agency, as the case may be, providing for regulation

with respect to rents, profits, dividends and disposition of property or

franchises;

d. that if the corporation receives a temporary loan or advance from

the housing development fund or a municipal housing development fund, as

established by or pursuant to article eleven of the private housing

finance law, the commissioner of housing and community renewal of the

state of New York or the supervising agency, as the case may be, shall

have the power, if, in his or its discretion, he or it determines either

that any such temporary loan or advance is in jeopardy of not being

repaid, or that the proposed housing project for which such temporary

loan or advance was made is in jeopardy of not being constructed, to

appoint to the board of directors of such corporation a number of new

directors, which number shall be sufficient to constitute a majority of

such board, notwithstanding any other provision of such certificate of

incorporation or of any other provision of law.

4. The certificate of incorporation of any such corporation organized

pursuant to the business corporation law and this article shall, in

addition, provide that each housing project of such corporation shall be

operated exclusively for the benefit of the persons or families who are

entitled to occupancy in such housing project by reason of ownership of

shares in such corporation, and that such corporation may issue shares

for home owners purchase notes if the purchase transaction has received

the written endorsement of the commissioner in accordance with

supplementary rules and regulations of the commissioner made therefor

and if at least two hundred dollars in money or property is received by

such corporation toward the issuance of such shares.

5. The secretary of state shall not file the certificate of

incorporation of any such corporation or any amendment thereto unless

the consent or approval of the commissioner or the supervising agency,

as the case may be, is affixed thereon or attached thereto. Consent to

the filing of such certificate of incorporation shall be based upon

findings by the commissioner or supervising agency as to the character

and competence of the sponsor.

§ 574 — Establishment of fund

Establishment of fund. 1. There is hereby created and

established in the division of housing and community renewal a revolving

fund to be known as the "housing development fund."

2. There shall be paid into such housing development fund (a) any

moneys appropriated and made available by the state for the purposes of

such fund, (b) notwithstanding the provisions of the state finance law

or any other provision of law, any moneys which the division of housing

and community renewal shall receive in repayment of advances made from

such fund, and (c) any other moneys which may be made available to the

division of housing and community renewal for the purpose of such fund

from any other source or sources.

2-a. All moneys paid into the fund from repayments of loans authorized

by section five hundred seventy-six-d of this article shall continue to

be made available for the purpose of providing loans pursuant to such

section.

3. Any moneys held in such housing development fund not required for

immediate disbursement may be invested, at the discretion of the

commissioner, in obligations of the state or the United States

government or obligations the principal and interest of which are

guaranteed by the state or the United States government. Any income or

interest earned by, or increment to, such housing development fund shall

be added to the moneys held in such fund for the purposes herein

provided.

§ 574-a — Municipal housing development fund

Municipal housing development fund. 1. A municipality may

create and establish a revolving fund to be known as the "municipal

housing development fund." Such a revolving fund shall be created and

established in the supervising agency.

2. There shall be paid into such municipal housing development fund

(a) any moneys appropriated and made available by the municipality for

the purposes of such fund, (b) notwithstanding the provisions of the

local finance law or any other provision of law, any moneys received in

repayment of advances made from such fund, and (c) any other moneys

which may be available for the purpose of such fund from any other

source or sources.

3. Any moneys held in such municipal housing development fund not

required for immediate disbursement may be invested, at the discretion

of the supervising agency, in obligations of the state or the United

States government or obligations the principal and interest of which are

guaranteed by the state or the United States government. Any income or

interest earned by, or increment to, such municipal housing development

fund shall be added to the moneys held in such fund for the purposes

herein provided.

§ 575 — Advances; conditions; repayment

Advances; conditions; repayment. 1. The commissioner of housing

and community renewal is hereby authorized to use the moneys held in the

housing development fund to make non-interest bearing advances to

housing development fund companies, and housing corporations in

accordance with the provisions of this article. Such moneys shall be

paid out of such fund, after audit by and upon the warrant of the

comptroller, on vouchers approved by the commissioner.

1-a. The supervising agency is hereby authorized to use the moneys

held in the municipal housing development fund or other funds

appropriated by the municipality to make non-interest bearing advances

to housing development fund companies in accordance with the provisions

of this article and the applicable law of the municipality.

2. No such advances shall be made with respect to a housing project

unless the commissioner or the supervising agency, as the case may be,

(a) finds (1) that the housing development fund company, or housing

corporation proposes to finance the project in whole or in part by a

federally-aided, state-aided or municipally-aided mortgage or (2) that

the project, if otherwise financed, will provide housing for persons or

families of low income, as defined in this chapter, and is otherwise

consistent with the purposes of this article; (b) finds that the project

site is suitable, there is a need for this housing type proposed in the

area to be served and the project is feasible; and (c) reasonably

anticipates that financing will be obtained and makes a finding to that

effect.

3. No such advances may be made to a housing corporation unless it

enters into an agreement with the commissioner to be regulated with

respect to rents, profits, dividends and disposition of its property or

franchises. No such advances may be made to a housing development fund

company unless it enters into an agreement in accordance with the

provisions of section five hundred seventy-six of this article.

4. The proceeds of such advance may be used only to defray the

development costs of such project.

5. Each such advance shall either (i) be consolidated with the lien of

a municipally-aided mortgage, or (ii) be repaid in full by the housing

development fund company, or housing corporation to the division of

housing and community renewal or to the supervising agency as directed

in paragraph (b) of subdivision two of section five hundred

seventy-four-a of this article, as the case may be. Such repayment shall

be made concurrent with receipt by the housing development fund company

or its successor in interest, or housing corporation of the proceeds of

its mortgage or construction loan, unless the commissioner or the

supervising agency, as the case may be, shall extend the period for the

repayment of such advances. In no event shall the time of repayment be

extended later than the date of final advance of funds pursuant to such

mortgage financing.

6. If the commissioner or the supervising agency, as the case may be,

in his or its discretion shall, at any time, determine that permanent

financing for the housing project may not be obtained, then and in that

event all advances made to the housing development fund company, or

housing corporation pursuant to this article shall become due and

payable upon the demand of the commissioner or the supervising agency,

as the case may be.

§ 576 — Regulatory agreements

Regulatory agreements. 1. Every housing development fund

company as a condition precedent to receiving an advance pursuant to

this article, shall enter into an agreement with the commissioner or

with the supervising agency, as the case may be, to be regulated as

follows:

a. Maximum rentals shall be fixed by the commissioner or the

supervising agency, as the case may be, based upon the final gross

project cost, at an amount sufficient to pay the necessary costs of the

project.

b. Dwellings in any such project shall be available for persons or

families whose probable aggregate annual income does not exceed six

times the rental (including the value or cost to them of heat, light,

water and cooking fuel) of the dwellings to be furnished such persons or

families, except that in the case of persons or families with three or

more dependents, such ratio shall not exceed seven to one. For purposes

of this paragraph, tenants in a housing project of a housing development

fund company organized under the provisions of the business corporations

law and this article shall have added to their total annual carrying

charges an amount equal to six per centum of the original investment of

such person or family in the equity obligations of such housing company.

c. Profits shall be used for capital improvements or to reduce

rentals.

d. Ordinary dividends may not be declared. Capital dividends may be

declared only with the consent of the commissioner or the supervising

agency, as the case may be.

e. The property or franchises of the corporation may not be disposed

of without the consent of the commissioner or the supervising agency, as

the case may be, nor may the corporation be dissolved unless payment in

full is made of remaining balances of principal and interest due and

unpaid on any mortgage or mortgages, of any advances made from the fund

pursuant to this article and of any and all expenses incurred in

effecting such dissolution.

f. The commissioner or the supervising agency, as the case may be,

shall have power, in his or its discretion, if he or it determines that

any advance pursuant to this article is in jeopardy of not being repaid,

or that the proposed housing project for which such advance was made is

in jeopardy of not being constructed, to appoint to the board of

directors of the corporation a number of new directors, which number

shall be sufficient to constitute a majority of such board. Directors so

appointed need not be stockholders or members or meet other

qualifications which may be prescribed by the certificate of

incorporation or by-laws. In the absence of fraud or bad faith

directors so appointed shall not be personally liable for the debts,

obligations or liabilities of the corporation.

2. A regulatory agreement pursuant to this section shall be terminated

upon repayment in full of any and all advances made pursuant to this

article provided that such termination shall not take place until (a)

assumption of the regulation of the project by the commissioner, in the

case of a state-aided mortgage, or by the supervising agency, in the

case of a municipally-aided mortgage or by the appropriate federal

authorities in the case of a federally-aided mortgage or (b) if the

project is not to be financed with a state-aided, municipally-aided or

federally-aided mortgage, the expiration of any exemption of the real

property of the project from local and municipal taxes.

3. The commissioner or supervising agency may require a housing

development fund company receiving advances under this article to

execute a financing statement for real property improvement. The

financing statement shall be in such form as the commissioner or

supervising agency shall prescribe and shall include the name and

address of the housing development fund company and of the agency making

the advances, the location of the project, with a description sufficient

to identify the property, including street address, if any, and a

statement that funds have or will be advanced to the company pursuant to

this article and the maximum amount of such advances, together with such

other information as the form shall specify. The financing statement

shall be filed in the office in which a mechanic's lien affecting the

property would be filed, which office shall accept it for filing without

fee and docket it in the manner of such lien. From the date of such

filing the state or municipality, as the case may be, shall have a lien

for the total of advances under this article made and not repaid. The

provisions of articles two and three of the lien law shall govern such

lien, except that it shall be valid for a period of three years from the

date of filing, unless extended as provided in section seventeen of the

lien law. Upon repayment of the advances, the commissioner or

supervising agency shall deliver to the housing development fund company

a copy of the financing statement with an endorsement thereon that the

lien is satisfied. Upon filing of such copy, without payment of fee, in

the office in which the financing statement was filed, the lien shall be

discharged.

§ 576-a — Acquisition and disposition of real property by municipality

Acquisition and disposition of real property by municipality.

1. Real property may be acquired by a municipality for a housing

development fund company by gift, grant, devise, purchase, condemnation

pursuant to the provisions of article nine of this chapter, or

otherwise.

2. Notwithstanding any other provision of general, special or local

law, charter or ordinance, a municipality may sell, lease or otherwise

dispose of real property to a housing development fund company without

public auction or sealed bids, provided that notice of such sale, lease

or other disposition is published and a hearing is held before the local

legislative body not less than ten days after such publication.

3. In any case where a municipality shall acquire real property for or

convey real property to a housing development fund company under the

provisions of this section, the deed or lease of the property to the

housing development fund company shall contain appropriate provisions

restricting the disposition of the property by the housing development

fund company, through provisions for a reversion of the property

conditioned on its continued use for purposes of housing, provisions

requiring the approval of the municipality to any sale, transfer,

exchange, assignment or lease, or otherwise.

§ 576-b — Special provisions with respect to state urban development corporation projects

Special provisions with respect to state urban development

corporation projects. Any state urban development corporation project

shall comply with the requirements of local laws, ordinances, codes,

charters or regulations applicable to the construction, reconstruction,

rehabilitation, alteration or improvement of such project, except where

the state urban development corporation, in its discretion, finds such

compliance not feasible or practicable, in which event such project

shall comply with the requirements of the state building construction

code, formulated by the state building code council pursuant to article

eighteen of the executive law, applicable to such construction,

reconstruction, rehabilitation, alteration or improvement. No county,

city, town or village shall have power to modify or change the drawings,

plans or specifications for the construction, reconstruction,

rehabilitation, or improvement of any such project or the construction,

plumbing, heating, lighting or other mechanical branch of work necessary

to complete the work in question, nor to require that any person, firm

or corporation employed on any such work shall perform any such work in

any other or different manner than that provided by such plans and

specifications, nor to require that any such person, firm or corporation

obtain any other or additional authority, approval, permit or

certificate from such county, city, town or village as a condition of

doing such work, nor shall any condition whatever be imposed by any such

county, city, town or village in relation to the work being done, and

the doing of any such work by any person, firm or corporation in

accordance with the terms of such drawings, plans, specifications or

contracts shall not subject said person, firm or corporation to any

liability or penalty, civil or criminal, other than as may be stated in

such contracts or incidental to the proper enforcement thereof; nor

shall any county, city, town or village have power to require that any

subsidiary of the New York state urban development corporation, or any

lessee therefrom or successor in interest thereto, obtain any other or

additional authority, approval, permit, certificate or certificate of

occupancy from such county, city, town or village as a condition of

owning, using, maintaining, operating or occupying any project acquired,

constructed, reconstructed, rehabilitated or improved by any such

subsidiary of the New York state urban development corporation.

§ 576-c — Loans to housing development companies by a municipality

* § 576-c. Loans to housing development companies by a municipality.

1. In addition to the powers granted to municipalities pursuant to this

article, a municipality, acting by its supervising agency, may make

loans for the purposes of acquisition, rehabilitation or construction of

dwelling accommodations to a non-profit housing development fund

company, a wholly-owned subsidiary of such company, a partnership the

controlling interest of which is held by such company and which has

agreed to limit profits or rate of return of investors in accordance

with a formula established or approved by the company, or a private

developer which has agreed to limit profits or rate of return of

investors in accordance with a formula established or approved by the

company, which agrees to provide housing accommodations exclusively for

persons and families of low income, at least thirty percent of whom are

referred to it by a municipality and have prior to their initial

occupancy in such accommodations resided in emergency shelter facilities

operated by or on behalf of the municipality or who are otherwise in

need of emergency shelter as determined by the municipality, providing,

however, that in the case of a building acquired by such a company,

subsidiary, partnership, or developer the obligation to provide housing

accommodations for such persons shall be applicable only to dwelling

accommodations which are or become vacant after the date of acquisition.

Such loans may be made for such period of time and pursuant to such

terms and conditions as may be required by the municipality, including,

but not limited to, terms and conditions providing that the lien created

by the note and mortgage, and, if applicable, any regulatory agreement

executed by the owner and such municipality or restrictive covenant

approved by a supervising agency, may be recorded in an equal or

subordinate position, or subsequently made equal or subordinate, to a

lien recorded by any private lender against the dwelling aided by the

loan made pursuant to this article, and the supervising agency of such

municipality may provide that the amount of the note and mortgage shall

automatically be reduced to zero in five equal decrements commencing on

the tenth year after the initial occupancy date, provided that, as of

the date of such reduction, such accommodations have been and continue

to be owned and operated in a manner consistent with an agreement with

the municipality contained in such note and mortgage to provide housing

for such persons. Notwithstanding such provision as contained in the

note and mortgage, the loan shall be reduced to zero only if, prior to

or simultaneously with delivery of such note and mortgage, the

supervising agency made a written determination that such reduction

would be necessary to ensure the continued affordability or economic

viability of such housing project. Such written determination shall

document the basis upon which the loan was determined to be eligible for

evaporation.

2. Notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, the emergency tenant protection act of

nineteen seventy-four, or any local law enacted pursuant thereto, upon

completion of the rehabilitation of any building used primarily for

residential purposes, in a jurisdiction in which rents are regulated

pursuant to any of the above laws and which is aided by a loan pursuant

to this section made by the municipality, the supervising agency shall

establish the initial rent for each rental dwelling unit within the

building. All dwelling units within the building subsequent to

establishment of initial rents by the supervising agency shall be

subject to either the rent stabilization law of nineteen hundred

sixty-nine or the emergency tenant protection act of nineteen

seventy-four, or both, if applicable to the locality. The tenants in

occupancy of such a dwelling unit regulated pursuant to any of the above

laws shall be offered a choice of a one or two year lease at the initial

rents established by the supervising agency notwithstanding any contrary

provisions of, or regulations adopted pursuant to, the rent

stabilization law of nineteen hundred sixty-nine and the emergency

tenant protection act of nineteen seventy-four. The supervising agency

shall cause all tenants in occupancy of each dwelling unit affected by

the provisions of this subdivision to be notified of and have an

opportunity to comment on the contemplated rehabilitation. Such

notification shall advise such tenants of the approximate expected rent

increase and the subsequent availability of a one or two year lease.

Such notification and opportunity to comment shall be provided before

the rehabilitation and again after the construction is completed and

before the establishment of the initial rents.

3. The supervising agency shall use its best efforts to ensure that

activities carried out pursuant to this article are structured so as to

minimize the likelihood of any involuntary economic displacement of

tenants who reside in multiple dwellings which are the subject of such

activities. However, if temporary physical displacement is required as a

direct result of rehabilitation work which is performed in such multiple

dwelling receiving a loan pursuant to this article, suitable temporary

relocation arrangements shall be provided.

* NB Effective until July 1, 2027

* § 576-c. Loans to housing development companies by a municipality.

In addition to the powers granted to municipalities pursuant to this

article, a municipality, acting by its supervising agency, may make

loans for the purposes of acquisition, rehabilitation or construction of

dwelling accommodations to a non-profit housing development fund

company, a wholly-owned subsidiary of such company, a partnership the

controlling interest of which is held by such company and which has

agreed to limit profits or rate of return of investors in accordance

with a formula established or approved by the company, or a private

developer which has agreed to limit profits or rate of return of

investors in accordance with a formula established or approved by the

company, which agrees to provide housing accommodations exclusively for

persons and families of low income, at least thirty percent of whom are

referred to it by a municipality and have prior to their initial

occupancy in such accommodations resided in emergency shelter facilities

operated by or on behalf of the municipality or who are otherwise in

need of emergency shelter as determined by the municipality, providing,

however, that in the case of a building acquired by such a company,

subsidiary, partnership, or developer the obligation to provide housing

accommodations for such persons shall be applicable only to dwelling

accommodations which are or become vacant after the date of acquisition.

Such loans may be made for such period of time and pursuant to such

terms and conditions as may be required by the municipality, including,

but not limited to, terms and conditions providing that the lien created

by the note and mortgage, and, as applicable, any regulatory agreement

executed by the owner and such municipality, may be recorded in an equal

or subordinate position, or subsequently made equal or subordinate, to

the lien recorded by any private lender against the dwelling aided by

the loan made pursuant to this article, and the supervising agency of

such municipality may provide that the amount of the note and mortgage

shall automatically be reduced to zero in five equal decrements

commencing on the tenth year after the initial occupancy date, provided

that, as of the date of such reduction, such accommodations have been

and continue to be owned and operated in a manner consistent with an

agreement with the municipality contained in such note and mortgage to

provide housing for such persons. Notwithstanding such provision as

contained in the note and mortgage, the loan shall be reduced to zero

only if, prior to or simultaneously with delivery of such note and

mortgage, the supervising agency made a written determination that such

reduction would be necessary to ensure the continued affordability or

economic viability of such housing project. Such written determination

shall document the basis upon which the loan was determined to be

eligible for evaporation.

* NB Effective July 1, 2027

§ 576-d — Master servicing agreement

Master servicing agreement. 1. The commissioner is hereby

authorized to use the monies held in the housing development fund to

make advances to a local loan administrator that has entered into a

written master servicing agreement prescribed by the commissioner

pursuant to subdivision two of this section.

2. The commissioner, in consultation with the comptroller, shall

prescribe a master servicing agreement to be executed by the

commissioner and local loan administrators. Such agreement shall provide

that: (a) any advances made to a local loan administrator shall be used

solely for the purpose of providing loans to agricultural producers for

undertaking farmworker housing projects; (b) the total amount of loans

made to any single agricultural producer shall not exceed two hundred

thousand dollars per annum; (c) the term of any loan shall not exceed

ten years and equal payments of principal payable no less frequently

than annually shall be required to be made on such loan during the term

such loan is outstanding which payments will liquidate the entire

principal balance of the loan over its term; (d) the local loan

administrator is required to pay to the commissioner for deposit into

the housing development fund all repayments including interest, if any,

received from any agricultural producers on account of such loan, except

for that portion permitted to be retained by the local loan

administrator as a fee pursuant to the master servicing agreement. The

master servicing agreement shall also set forth: (i) the form of any

note and security agreement to be executed by the agricultural producer

in connection with any loan, which shall include a provision that use of

the loan to provide housing for a family member of the borrower or its

principals shall constitute a default under the loan and security

agreement; (ii) the rate of interest, if any, to be charged on any loan;

(iii) the amount of any fee to be retained by the local loan

administrator for servicing any loan; (iv) the form of application

required to be completed by an agricultural producer for any loan; (v)

the form of requisition and certification to be required from a local

loan administrator to obtain an advance of funds from the commissioner;

(vi) any other conditions to be imposed upon an agricultural producer as

a condition of receiving a loan; (vii) the responsibilities to be

performed by the local loan administrator in connection with reviewing,

approving and servicing the loan and the circumstances under which the

commissioner may terminate a master servicing agreement; (viii)

conditions necessary to insure prompt closing on loans for which funds

are advanced, including payment of interest of funds from the time

advanced until utilized; and (ix) such other requirements as the

commissioner may from time to time establish by rules and regulations

consistent with the purposes of this section.

3. (a) The commissioner shall, subject to the availability of funds as

appropriated by the legislature, advance from the housing development

fund to a local loan administrator the amount of funds requested in any

requisition within fifteen business days after receipt of all of the

following: a completed requisition for an advance of funds; copies of

any applications and any supporting documentation to which such

requisition pertains; and a certification from the local loan

administrator with respect to such requisition in addition to any other

representation and statement required by the commissioner. The

certification from the local loan administrator shall state that: (i)

the loan administrator has performed its responsibilities in connection

with review and approval of applications to which such requisition

pertains, (ii) to the best of the local loan administrator's knowledge

the loans, to which the advances pertain, comply with the master

servicing agreement and the provisions of this section, and (iii) the

borrowers have demonstrated their ability to make the repayments

required under the loan. In the event that funds are not available or

the commissioner determines that the requisition, application or

certification is defective, it shall so notify the local loan

administrator within fifteen business days after receipt of the

requisition.

(b) The commissioner shall establish criteria for prioritizing loan

applications in the event that the requisitions submitted to the

commissioner by one or more local loan administrators exceed the amount

then available for the purposes of this section. Such criteria shall

give a priority to housing for farmworkers and take into account: (i)

whether the farmworker housing project to which the application pertains

is for the purpose of bringing non-conforming accommodations in

compliance with the provisions of the state sanitary code or the state

fire prevention and building code; (ii) whether the farmworker housing

project to which the application pertains is the most cost effective

approach to enable the agricultural producer to construct or

rehabilitate dwelling accommodations for farmworkers; (iii) whether the

agricultural producer making application lacks the financial resources

to undertake the farmworker housing project without obtaining a loan

pursuant to this section; and (iv) such other factors as the

commissioner deems relevant. In applying the criteria to be utilized for

prioritizing loans, the commissioner shall be entitled to rely on the

information contained in the copies of the applications submitted with

the requisition.

§ 576-e — Municipal housing assistance fund

Municipal housing assistance fund. 1. A municipality may

create and establish a fund to be known as the "municipal housing

assistance fund". Such a fund shall be created and established in the

supervising agency.

2. There may be paid into such municipal housing assistance fund (a)

any moneys appropriated and made available by the municipality for the

purposes of such fund, (b) notwithstanding the provisions of the local

finance law or any other provisions of law, any moneys received in

repayment of loans from such fund, and (c) any other moneys which may be

available for the purpose of such fund from any other source or sources.

3. The purpose of such fund shall be to make loans to housing

development fund companies which have agreed to acquire residential

properties by deed from the commissioner of finance of a municipality

and to operate and manage such properties in accordance with a

regulatory agreement with the municipality until the properties are

transferred to a new owner approved by the municipality.

4. The supervising agency may make loans from the fund to enable such

housing development fund companies to pay development costs and any

other expenses incurred by the housing development fund company and

approved by the supervising agency.

5. Any housing development fund company which receives a loan pursuant

to this section shall execute a note and regulatory agreement. The note

may provide that it shall be reduced to zero over a period of continued

compliance with either the regulatory agreement required pursuant to

this section or such other regulatory agreement as the supervising

agency shall require. The loan shall be reduced to zero only if prior to

or simultaneously with delivery of such note, the supervising agency has

made a written determination that such reduction would be necessary to

ensure the continued affordability or economic viability of the project.

Such written determination shall document the basis upon which the loan

was determined eligible for evaporation.

6. A regulatory agreement pursuant to this section may terminate upon

such terms and conditions as provided by the supervising agency.

7. A housing development fund company which receives a loan pursuant

to this section shall provide in its certificate of incorporation that

the supervising agency shall have the power if in its discretion it

determines that the company has defaulted in its obligations to the

municipality to appoint to the board of such corporation a number of new

directors which number shall be sufficient to constitute a majority of

the board, notwithstanding any other provisions of such certificate or

of any other provision of law.

§ 577 — Tax exemptions

Tax exemptions. 1. (a) The local legislative body of any

municipality in which a project of a housing development fund company is

or is to be located may exempt the real property in such project from

local and municipal taxes including school taxes, other than assessments

for local improvements, to the extent of all or part of the value of the

property included in the completed project. The tax exemption shall

operate and continue for such period as may be provided by such local

legislative body, but in no event for a period of more than forty years,

commencing in each instance from the date on which the benefits of such

exemption first became available and effective.

(b) Where a municipality acts on behalf of another taxing jurisdiction

in assessing real property for the purpose of taxation, or in levying

taxes therefor, the action of the local legislative body of such

municipality in granting such tax exemption shall have the effect of

exempting the real property in such project from local and municipal

taxes including school taxes, other than assessments for local

improvements, levied by or in behalf of both such taxing jurisdictions.

(c) The local legislative body of any municipality may grant an

exemption under paragraph (a) of this subdivision to the real property

of a project of any entity to which it is authorized to make a loan

pursuant to section five hundred seventy-six-c of this article.

(d) In a city having a population of one million or more, within one

hundred twenty days following receipt of a written submission from the

supervising agency requesting a tax exemption pursuant to paragraph (a)

of this subdivision for the real property containing the project of a

housing development fund company, the local legislative body shall

approve or disapprove by resolution the requested tax exemption. If the

local legislative body fails to take such action within one hundred

twenty days following receipt of such written submission from such

supervising agency, then the tax exemption requested by the supervising

agency shall be deemed approved pursuant to paragraph (a) of this

subdivision.

2. Any inconsistent provision of law to the contrary notwithstanding,

mortgages of a housing development fund company shall be exempt from the

mortgage recording taxes imposed by article eleven of the tax law.

2-a. Notwithstanding any inconsistent provision of law to the

contrary, a project of a housing development fund company incorporated

pursuant to the not-for-profit corporation law and this article shall be

exempt from the sales and compensating use taxes imposed pursuant to

article twenty-eight or twenty-nine of the tax law, provided that such

housing development fund company has entered into a regulatory agreement

with respect to the provision of affordable housing with the

commissioner, a state agency or authority as defined in this chapter,

the New York city department of housing preservation and development, or

the New York city housing development corporation, and such tax

exemption shall continue only so long as such agreement is in force and

effect.

3. (a) Notwithstanding the provisions of subdivision one hereof, the

real property of a state urban development corporation project acquired,

owned, constructed, managed or operated by a company incorporated

pursuant to the not-for-profit corporation law and this article shall be

entitled to all the benefits provided by section four hundred twenty-two

of the real property tax law. The real property of a state urban

development corporation project, other than a state urban development

corporation project acquired, owned, constructed, managed or operated by

a company incorporated pursuant to the not-for-profit corporation law

and this article, shall be exempt from all local and municipal taxes,

other than assessments for local improvements, to the extent of the

value of the property included in such project as represents an increase

over the assessed valuation of the real property, both land and

improvements, acquired for the project on the date of its acquisition by

the housing development fund company. The tax exemption shall operate

and continue so long as the mortgage loans of such housing development

fund company are outstanding, but in no event for a period of more than

forty years, commencing in each instance from the date when such housing

development fund company first acquired such property. If a state urban

development corporation project qualifying for tax exemption pursuant to

this subdivision is sold, with the approval of the commissioner, to

another housing development fund company, such successor company shall

be entitled to all the benefits of this subdivision.

(b) In the event a state urban development corporation project is not

subject to a state-aided, federally-aided or municipally-aided mortgage,

as defined herein, it shall receive the tax exemption granted under

paragraph (a) of this subdivision only if it has entered into a

regulatory agreement with the commissioner pursuant to section five

hundred seventy-six of this article, and such tax exemption shall

continue only so long as such agreement is in force and effect.

§ 577-a — Adjusting fair rental equalization for the elderly

Adjusting fair rental equalization for the elderly. (a) For

the purpose of enabling lower income elderly persons to continue in

occupancy without paying rentals in excess of a fair proportion of their

income, any municipality having a population of less than one million is

authorized to make and to contract to make periodic payments to a

housing development fund company in an amount not exceeding the

difference between the rent or carrying charges for the dwellings

occupied by such lower income persons and one-third of their net

probable aggregate annual income, where such rent or carrying charges

exceed such one-third of income; provided that the aggregate amount of

periodic payments to be made in accordance with contracts entered into

by the municipality during any fiscal year thereof pursuant to this

section, subdivision nine of section thirty-one, subdivision seven of

section eighty-five-a, and section one hundred twenty-six of this

chapter shall not exceed the aggregate amount of all real property taxes

paid or payable during such fiscal year by all companies organized

pursuant to this article, article II, article IV, and article V of this

chapter and the aggregate estimated receipts of all such companies in

such fiscal year from rental surcharges collected or to be collected

pursuant to this chapter.

(b) Such payments shall be made only where over-income tenants are

required to pay surcharges to the municipality.

(c) Such payments shall be made only on account of a person or family

in occupancy where the head of the household is sixty-two years of age

or older and is not a recipient of public assistance pursuant to the

social services law, and where the net probable aggregate annual income

of the person or family in occupancy does not exceed six thousand five

hundred dollars a year. Notwithstanding the provisions of subdivision

twenty-nine of section two of this chapter, net probable aggregate

annual income as used in this subdivision shall mean the annual income

of family members from all sources after deduction of federal, state and

city income taxes; provided that any municipality may provide that

increases in benefits under the social security act which take effect

after such person or family has assumed occupancy shall not be taken

into account.

(d) A company having a contract with the municipality pursuant to this

subdivision may not collect from persons or families in occupancy on

whose account such payments are made any rentals in excess of the

amounts specified in such contract.

§ 577-b — Payment of arrears for certain taxes

Payment of arrears for certain taxes. 1. The term eligible

property as used in this section shall mean a multiple dwelling located

in a city with a population of one million or more and owned by a

company established pursuant to this article which:

(a) is controlled by and provides housing accommodations to its

resident shareholders or members or agrees, on terms approved by the

supervising agency, to offer to the residents of the multiple dwelling

the opportunity to acquire ownership and control of the company; and

(b) on January first, two thousand two, had outstanding municipal real

estate taxes relating to any period prior to January first, two thousand

one.

2. (a) The supervising agency may offer to each company that owns an

eligible property an opportunity to enter into a regulatory agreement

pursuant to which the obligation to pay arrears of real estate taxes

attributable to such property, including interest and penalties if any,

shall be dealt with as provided in such agreement.

(b) The regulatory agreement shall include the following provisions:

(1) a term of thirty years;

(2) that the suspension of the obligation to pay arrears shall

continue provided that the company complies with the terms of the

regulatory agreement;

(3) that all suspended arrears including interest and penalties shall

be forgiven provided that the company complies with the regulatory

agreement for an initial period of ten years;

(4) that portions of the suspended arrears may be forgiven during the

initial ten year period pursuant to a schedule established in the

regulatory agreement;

(5) that any suspended obligations which have not been forgiven may be

reinstated if the company fails to comply with the regulatory agreement;

(6) that all new municipal charges must be paid in a timely fashion;

(7) that the supervising agency shall be authorized to assume control

of the company if the company fails to comply with the agreement;

(8) that the company must comply with customary financial and other

reporting requirements; and

(9) that the company shall be required to increase maintenance charges

or impose assessments to insure that the company can provide for its

obligations.

(c) The regulatory agreement shall also include terms to address the

following matters as well as any other issues that the supervising

agency deems appropriate:

(1) establishment of a structured reserve fund;

(2) restrictions to insure sales and rentals only to low income

individuals and families;

(3) establishment of a transfer fee payable to the company's reserve

fund upon the sale of any units;

(4) restrictions on subletting;

(5) primary residence requirements; and

(6) certification of annual elections.

(d) The regulatory agreement may contain such alterations to the terms

of the original disposition as the supervisory agency deems necessary.

§ 578 — Advisory and educational services

Advisory and educational services. The commissioner and the

supervising agency are each hereby authorized to provide to housing

development fund companies such advisory, consultative, training and

educational services as will assist them to become eligible borrowers in

accordance with the provisions of this article. Such advisory and

educational services may include but are not necessarily limited to

technical and professional planning assistance, the preparation and

promulgation of organizational, planning and development outlines and

guides, consultation services, training courses, seminars and lectures,

the preparation and dissemination of newsletters and other printed

materials, and the services of field representatives. The commissioner

and the supervising agency are each also authorized to provide advisory,

consultative, technical, training and educational services to housing

development fund companies in the management of such projects and to

residents thereof, including but not limited to home management and such

other training and advisory services as may be necessary for the

efficient and harmonious management of the project.

§ 579 — Rules and regulations

Rules and regulations. The commissioner and the supervising

agency shall each have power to make rules and regulations to carry out

their respective powers and duties pursuant to this article and to

effectuate the purposes thereof.

§ 580 — Examination by comptroller

Examination by comptroller. 1. The comptroller, or his legally

authorized representative, is hereby authorized and empowered from time

to time to examine the books and accounts of the division relating to

the housing development fund, and from time to time, not less than once

every five years, to examine the books and accounts of each housing

development fund company which received or is to receive aid from such

fund pursuant to this article, including its receipts, disbursements,

contracts, leases, loans, and any other moneys relating to its financial

operation, and from time to time, to examine the books and accounts of

any local loan administrator which has received advances from such fund

pursuant to this article, but only insofar as those books and accounts

relate to such advances and to the local loan administrator's compliance

with the master servicing agreement entered into pursuant to section

five hundred seventy-six-d of this article.

2. The comptroller of a municipality or, in the case of a municipality

having no comptroller, the chief fiscal officer of such municipality, is

hereby authorized and empowered from time to time to examine the books

and accounts relating to the municipal housing development fund, and the

supervising agency is hereby authorized and empowered from time to time,

not less than once every five years, to examine the books and accounts

of each housing development fund company which received or is to receive

aid from such fund, including its receipts, disbursements, contracts,

leases, loans, and any other moneys relating to its financial operation.

§ 581 — Inconsistent provisions in other laws superseded

Inconsistent provisions in other laws superseded. Insofar as

the provisions of this article are inconsistent with the provisions of

any other law, general, special or local, the provisions of this article

shall be controlling.

§ 582 — Separability clause

Separability clause. If any clause, sentence, paragraph,

section or part of this article shall be adjudged by any court of

competent jurisdiction to be invalid such judgment shall not affect,

impair or invalidate the remainder thereof, but shall be confined in its

operation to the clause, sentence, paragraph, section or part thereof

directly involved in the controversy in which such judgment shall have

been rendered.

ARTICLE 13 Miscellaneous

§ 600 — Construction

Construction. This chapter shall be construed liberally to

effectuate the purposes hereof, and the enumeration of specific powers

in this chapter shall not operate to restrict the meaning of any general

grant of power contained in this chapter or to exclude other powers

comprehended in such general grant.

§ 601 — Separability clause

Separability clause. If any clause, sentence, paragraph,

section or part of this chapter shall be adjudged by any court of

competent jurisdiction to be invalid, such judgment shall not affect,

impair or invalidate the remainder thereof, but shall be confined in its

operation to the clause, sentence, paragraph, section or part thereof

directly involved in the controversy in which such judgment shall have

been rendered.

§ 602 — Prohibition against discrimination

Prohibition against discrimination. For all the purposes of

this chapter, no person shall, because of race, creed, color or national

origin, be subjected to any discrimination.

§ 603 — Pending actions or proceedings

Pending actions or proceedings. This chapter or anything

therein contained shall not affect or abate any actions, proceedings,

civil or criminal, pending at the time when this chapter shall take

effect, brought by, for or against the state, the state division of

housing, any municipality, limited-profit housing company, the New York

state housing finance agency, limited-dividend housing corporation,

redevelopment company, urban redevelopment corporation or mortgage

facilities corporation, under or in pursuance of the provisions of the

laws repealed by this chapter; but all such actions or proceedings may

be continued, prosecuted, conducted and completed as if such laws were

not repealed but continued to be fully effective.

§ 604 — Saving clause

Saving clause. 1. The repeal of the laws as specified in

section six hundred five and any other provisions of this chapter, shall

not affect or impair any contract or remedy, or any act done or any

right accruing, accrued or acquired, taxes, tax obligations, or

exemptions from taxation, the validity of or rights as to taxes

collected or proceeds thereof or the validity as to any acts done or

rights or exemptions accruing, accrued or acquired under any tax laws,

general, local or special, or any penalty, forfeiture or punishment

under or by virtue of the laws so repealed and in existence prior to the

time when this chapter or any section thereof takes effect, but the same

may be asserted, enforced, prosecuted or inflicted and for such purposes

all of the laws specified in section six hundred five are hereby

continued in full force and effect.

2. An act of the legislature of the years nineteen hundred sixty-one

or sixty-two which, in form, amends or repeals or purports to amend or

repeal any provision or provisions of articles seven, nine, ten, twelve

or twelve-a, of the public housing law, chapter eight hundred forty-five

of the laws of nineteen hundred forty-two, chapter eight hundred

ninety-two of the laws of nineteen hundred forty-one or chapter five

hundred sixty-four of the laws of nineteen hundred fifty-six, as in

force immediately prior to March first, nineteen hundred sixty-two,

shall be deemed and construed as an amendment or repeal, as the case may

be, of the corresponding provision or provisions of such article,

section or law, as contained in this chapter.

3. An act of the legislature of the years nineteen hundred sixty-one

or sixty-two which adds, or purports to add a new section, subdivision

or other provision of law to articles seven, nine, ten, twelve or

twelve-a of the public housing law, chapter eight hundred forty-five of

the laws of nineteen hundred forty-two, chapter eight hundred ninety-two

of the laws of nineteen hundred forty-one, or chapter five hundred

sixty-four of the laws of nineteen hundred fifty-six, as in force

immediately prior to March first, nineteen hundred sixty-two, shall be

deemed and construed as having been added to this chapter and shall be

given full effect according to its context as if the same had been added

expressly and in terms to this chapter and shall be deemed and construed

to have been inserted in this chapter in the appropriate position in

regard to and as modifying the effect of the corresponding provision or

provisions of this chapter.

4. Reference in any act of the legislature of the years nineteen

hundred sixty-one or sixty-two to articles seven, nine, ten, twelve or

twelve-a of the public housing law, chapter eight hundred forty-five of

the laws of nineteen hundred forty-two, chapter eight hundred ninety-two

of the laws of nineteen hundred forty-one or chapter five hundred

sixty-four of the laws of nineteen hundred fifty-six, or any provision

or provisions thereof, as in force immediately prior to March first,

nineteen hundred sixty-two, shall be deemed and construed to refer to

the corresponding article, section or other provision of this chapter

and shall be given full effect according to its terms as though

specifically referring to such corresponding article, section or other

provision of this chapter.

§ 605 — Laws repealed

Laws repealed. Of the laws enumerated in the schedule hereto

annexed, that portion specified in the last column is hereby repealed,

except as provided in sections ninety-six and six hundred four.

SCHEDULE OF LAWS REPEALED

Public Housing Article 1 Subdivision 14-a of section 3

Law Article 7 Sections 129, 130, 131, 134, 135

Article 9 All

Laws of Chapter Section

1941 892 All

1942 845 All

1943 234 All

1946 673 All

1947 840 All

1951 190 All

1955 407 All except section 2

1956 564 All

1956 832 All

1956 877 All

1957 218 All

1957 334 All

1957 608 All

1957 750 All

1957 971 All

1957 973 Sections 1, 2, 3 and 4

1958 364 All

1958 505 Sections 1 and 2

1958 656 All

1958 904 All

1958 957 Section 1

1959 486 All

1959 675 Sections 1, 2, 3 and 4

1959 727 All

1960 116 Sections 1 and 2

1960 359 Sections 4, 5 and 6

1960 669 All

1960 670 Sections 1, 2 and 3

1960 671 All except section 3

1960 694 All

1960 892 Section 3

1960 959 Section 2

1960 990 All

§ 606 — Extension of the time for payment and suspension of payment of real estate tax liens

Extension of the time for payment and suspension of payment of

real estate tax liens. 1. As used in this section the term abandoned

multiple dwelling shall mean a class A or class B multiple dwelling

containing in the aggregate not less than three dwelling units, at least

eighty percent of the occupied dwelling units of which are occupied by

persons or families of low income as defined in subdivision ten of

section twelve of this chapter and which the supervising agency shall

find has been abandoned by the owner or owners thereof. Any such finding

shall be based on one or more of the following conditions:

(a) Failure to make any payments in respect of real estate taxes on

said multiple dwelling for twelve months or more, and a continuing

failure to maintain essential services, or failure to remove violations

of the local housing maintenance code or other statutes applicable to

multiple dwellings, where, as a result of either such failure the

multiple dwelling has become dangerous to the life, health and safety of

its occupants; or

(b) Failure to make any payments in respect of real estate taxes on

said multiple dwelling for twelve months or more and failure to attempt

to collect rent from a majority of the tenants in lawful occupancy of

dwelling units in such multiple dwelling for a period of three

consecutive months or more; or

(c) The entry of a judgment in favor of the petitioning tenants in a

proceeding instituted pursuant to article seven-A of the real property

actions and proceedings law, and the failure by the owner or other

respondent to secure the removal of the administrator appointed pursuant

to such judgment within ninety days after his appointment and

qualification; or

(d) The entry or filing of an order appointing a receiver pursuant to

section three hundred nine of the multiple dwelling law or any other law

authorizing the appointment of a municipality or any agency or official

thereof as receiver of a multiple dwelling, and the failure by the owner

or other party entitled thereto to secure the removal or discharge of

such receiver within ninety days thereafter.

2. Whenever a housing project (i) of a housing development fund

company organized pursuant to the provisions of article eleven of this

chapter, (ii) of a company organized pursuant to the provisions of

article two, four or five of this chapter, (iii) of a company or owner

aided by article three, eight, twelve, fourteen or fifteen of this

chapter, or (iv) is to be financed by a mortgage made or insured by the

federal government or any agency or instrumentality thereof or a

mortgage loan entered into in conjunction with a housing assistance

payments contract in connection with new construction or substantial

rehabilitation pursuant to section eight of the United States Housing

Act of 1937, as amended, is premised upon the acquisition, ownership,

rehabilitation and management of an abandoned multiple dwelling, as said

term is defined in subdivision one of this section, the supervising

agency may, subject to the requirements of subdivision four of this

section, enter into an agreement with such housing company or owner,

which agreement shall provide for one or more of the following with

respect to accrued real estate tax liens and municipal charges arising

by operation of law upon the properties upon which such abandoned

multiple dwelling is located:

(a) The extension of the time for the payment of all or part of

accrued real estate tax liens and municipal charges arising by operation

of law by spreading the payment thereof over a period or periods of time

to commence presently or at some future time, but in no event beyond

forty years from the date of such agreement;

(b) The elimination of interest and penalties on all or part of the

unpaid real estate tax liens and municipal charges arising by operation

of law;

(c) The suspension of the payment of all or a part of accrued real

estate tax liens and municipal charges arising by operation of law for a

period not to exceed forty years from the date of such agreement;

(d) The elimination of all or part of accrued real estate tax liens

and municipal charges arising by operation of law provided that in

consideration of such elimination the municipality may require the

housing company to convey to it by deed an indefeasibly vested interest

in the real property of the project, the value of which shall be set

forth in such agreement but shall in no event be less than the amount of

real estate tax liens and municipal charges arising by operation of law

eliminated, to take effect as provided therein but not later than forty

years from the date thereof.

3. No such agreement for the extension or suspension of payment or

elimination of accrued real estate tax liens and municipal charges

arising by operation of law shall be entered into until the supervising

agency shall first have made written findings supported by satisfactory

evidence that:

(a) The project is an abandoned multiple dwelling, as defined in

subdivision one of this section, and the owner who so abandoned such

dwelling has no direct or indirect interest or participation in the

project; and

(b) The housing company has available or has a reasonable expectation

of obtaining from public or private sources, or both, adequate financing

to acquire and rehabilitate the property; and

(c) The housing company possesses or has given satisfactory evidence

of its ability and intention to employ adequate competent personnel

capable of rehabilitating, supervising the rehabilitation and managing

and operating the property in accordance with the standards and

conditions prescribed by this section and by the supervising agency; and

(d) The proposed rehabilitation will effectuate the removal of all

housing and other violations of record against the property as well as

all incipient violations disclosed by inspections of the supervising

agency and other agencies of the municipality charged with enforcement

of applicable statutes and ordinances prescribing standards of

construction and housing maintenance and will result in the removal of

all unsafe and unsanitary conditions; and

(e) The proposed rehabilitation will not require the removal of or

relocation of any residential tenants in occupancy, other than

temporarily, during the period of construction, in which case suitable

arrangements have been made for such temporary relocation; and

(f) In order for the housing company to acquire the property and to

rehabilitate, operate and maintain the same as provided herein, accrued

real estate tax liens and municipal charges arising by operation of law

affecting the property must be extended, suspended or eliminated, in

whole or in part, as provided in subdivision two of this section, which

finding shall set forth the exact amount of accrued real estate tax

liens and municipal charges arising by operation of law and set forth

full details as to the extension, suspension and elimination thereof

required in order for the rents or carrying charges to be fixed and

established by the supervising agency or as otherwise provided pursuant

to the provisions of article two, three, four, five, eight, eleven,

twelve, fourteen or fifteen of this chapter, or in connection with a

mortgage made or insured by the federal government or any agency or

instrumentality thereof or a mortgage loan entered into in conjunction

with a housing assistance payments contract in connection with new

construction or substantial rehabilitation pursuant to section eight of

the United States Housing Act of 1937, as amended, whichever may be

applicable, and shall further contain the calculations and assumptions

upon which such finding is based and shall state that the projected

rents or carrying charges are as high as the present occupants can

reasonably afford, and as can reasonably be charged and collected for

comparable housing accommodations in the immediate vicinity of the

abandoned multiple dwelling; and

(g) The abandoned multiple dwelling is located in a deteriorated or

deteriorating neighborhood or one imminently threatened with

deterioration, and that unless the project is carried out, the property

will become unsafe and unfit for continued human habitation in the near

future, and that by reason of its present and probable future condition,

the property is exerting or will in the near future, exert a deleterious

influence upon the block in which it is located and upon the blocks,

neighborhood and area immediately surrounding and adjacent thereto.

4. The agreement, with respect to a housing development fund company,

shall contain all of the provisions required by section five hundred

seventy-six of this chapter, and with regard to any housing company,

including such housing development fund company, shall contain such

other provisions as may be approved by the local legislative body.

5. (a) An agreement authorized by subdivisions two and four of this

section shall be submitted by the supervising agency to the local

legislative body of the municipality in which the project is to be

located, which body may determine to extend, suspend and/or eliminate

the payment of all or any part of the accrued real estate tax liens and

municipal charges arising by operation of law on the real property in

such project, but in no event beyond the limitations set forth in

subdivision two of this section. The extension, suspension or

elimination of real estate tax liens and municipal charges arising by

operation of law may include all accrued local and municipal taxes,

including assessments, water and sewer rents and sewer charges and

special ad valorem levies and all emergency repair levies but shall not

include any taxes or municipal charges accruing in respect of any parcel

for any period commencing after a date fixed by the local legislative

body, such date being not later than the projected date of substantial

completion of the rehabilitation of the building situated on such

parcel.

(b) Where the municipality acts on behalf of another taxing

jurisdiction in assessing real property for the purpose of taxation, or

in levying taxes therefor, the determination of the local legislative

body in granting such extension, suspension or elimination shall have

the effect of extending, suspending or eliminating the accrued real

estate tax liens against the real property in such project to the extent

and subject to the provisions of paragraph (a) of this subdivision.

§ 607 — Rent regulation of multiple dwellings rehabilitated with a loan granted pursuant to section three hundred twelve of the housing act of ni...

Rent regulation of multiple dwellings rehabilitated with a loan

granted pursuant to section three hundred twelve of the housing act of

nineteen hundred sixty-four. 1. In cities with a population of one

million or more, upon completion of rehabilitation of a class A multiple

dwelling, which is aided by a loan made pursuant to section three

hundred twelve of the housing act of nineteen hundred sixty-four, the

agency shall establish the initial rent for each rental dwelling unit

within the rehabilitated or converted multiple dwelling notwithstanding

the provisions of, or any regulation promulgated pursuant to, the

emergency housing rent control law, the local emergency housing rent

control act, the emergency tenant protection act of nineteen

seventy-four, the local rent stabilization law or any local law enacted

pursuant thereto. After the agency has set the initial rents, all rental

dwelling units within such rehabilitated or converted multiple dwellings

shall become subject to the rent stabilization law of nineteen hundred

sixty-nine.

2. The occupant in possession of such a dwelling unit when the

multiple dwelling is made subject to the rent stabilization law of

nineteen hundred sixty-nine shall be offered a choice of a one or two

year lease at the initial rents established by the agency

notwithstanding any contrary provisions of, or regulations adopted

pursuant to, the rent stabilization law of nineteen hundred sixty-nine

and the emergency tenant protection act of nineteen seventy-four.

3. Prior to establishing initial rents the agency shall cause all

tenants in occupancy of such multiple dwelling to be notified of, and

have an opportunity to comment on, the contemplated rehabiliation. Such

notification shall advise such tenants of the approximate expected rent

increase and the subsequent availability of a one or two year lease.

Such notification and opportunity to comment shall be provided before

the rehabilitation and again after the construction is complete and

before the establishment of the initial rents.

4. For the purposes of this section, "multiple dwelling" shall include

any class A multiple dwelling having three or more units, and shall

include multiple family garden-type maisonette dwelling complexes under

single ownership having common facilities such as a sewer line, water

main and heating plant notwithstanding the fact that certificates of

occupancy were issued for portions thereof as one or two family

dwellings.

5. For the purposes of this section, the meaning of the terms

"agency", "conversion", "non-residential property" and "rehabilitation"

shall be the meaning provided pursuant to section eight hundred one of

this chapter.

6. The agency may promulgate supplementary rules and regulations to

carry out the provisions of this section, not inconsistent with the

provisions of this section.

§ 608 — Rent regulation of rehabilitated multiple dwellings aided by certain federal housing assistance programs

Rent regulation of rehabilitated multiple dwellings aided by

certain federal housing assistance programs. 1. In cities with a

population of one million or more, upon completion of rehabilitation of

a class A multiple dwelling which is aided by a mortgage loan entered

into in conjunction with a housing assistance payments contract in

connection with moderate rehabilitation pursuant to section eight of the

United States housing act of 1937, as amended, the agency shall

establish the initial rent for each rental dwelling unit within the

rehabilitated or converted multiple dwelling notwithstanding the

provisions of, or any regulation promulgated pursuant to, the emergency

housing rent control law, the local emergency housing rent control act,

the emergency tenant protection act of nineteen seventy-four, the local

rent stabilization law or any local law enacted pursuant thereto. After

the agency has set the initial rents, all rental dwelling units within

such rehabilitated or converted multiple dwellings shall become subject

to the rent stabilization law of nineteen hundred sixty-nine.

2. The occupant in possession of such a dwelling unit when the

multiple dwelling is made subject to the rent stabilization law of

nineteen hundred sixty-nine shall be offered a choice of a one or two

year lease at the initial rents established by the agency

notwithstanding any contrary provisions of, or regulations adopted

pursuant to, the rent stabilization law of nineteen hundred sixty-nine,

and the emergency tenant protection act of nineteen seventy-four.

3. Prior to establishing initial rents the agency shall cause all

tenants in occupancy of such mulitple dwelling to be notified of, and

have an opportunity to comment on, the contemplated rehabilitation. Such

notification shall advise such tenants of the approximate expected rent

increase and the subsequent availability of a one or two year lease.

Such notification and opportunity to comment shall be provided before

the rehabilitation and again after the construction is complete and

before the establishment of the initial rents.

4. For the purposes of this section, "multiple dwelling" shall include

any class A multiple dwelling having three or more units, and shall

include multiple family garden-type maisonette dwelling complexes under

single ownership having common facilities such as a sewer line, water

main and heating plant notwithstanding the fact that certificates of

occupancy were issued for portions thereof as one or two family

dwellings.

5. For the purposes of this section, the meaning of the terms

"agency", "conversion", "non-residential property" and "rehabilitation"

shall be the meaning provided pursuant to section eight hundred one of

this chapter.

6. The agency may promulgate supplementary rules and regulations to

carry out the provisions of this section, not inconsistent with the

provisions of this section.

§ 608-a — Rent regulation of rehabilitated multiple dwellings acquired and reconveyed by the federal government

* § 608-a. Rent regulation of rehabilitated multiple dwellings

acquired and reconveyed by the federal government. 1. For the purposes

of this section:

(a)"Agency" shall mean a department of housing preservation and

development in a city having a population of one million or more.

(b) "Eligible property" shall mean real property located in a city

having a population of one million or more that has been: (i) acquired

by the federal government as the result of the foreclosure of a mortgage

loan insured by the federal government, and (ii) conveyed by the federal

government to an owner approved by the agency for the purpose of

undertaking an eligible rehabilitation project.

(c) "Eligible multiple dwelling" shall mean a multiple dwelling

located on eligible property that has been the subject of an eligible

rehabilitation project.

(d) "Eligible rehabilitation project" shall mean the rehabilitation of

an eligible multiple dwelling in accordance with an agreement between

the owner of the eligible property and the federal government.

2. Notwithstanding the provision of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, the emergency tenant protection act of

nineteen seventy-four, and/or any local law enacted pursuant thereto,

upon completion of an eligible rehabilitation project, the agency may

establish the initial rent for each dwelling unit within the eligible

multiple dwelling. All dwelling units within such building subsequent to

establishment of initial rents by the agency shall be subject to the

emergency housing rent control law, the local emergency housing rent

control act, the emergency tenant protection act of nineteen

seventy-four, and/or any local law enacted pursuant thereto, if

applicable in the municipality in which such building is located, but

only if such laws and/or acts would otherwise apply to such dwelling

units; provided, however, that substantial rehabilitation work performed

in the course of an eligible rehabilitation project shall not cause such

laws and/or acts to cease to apply to such dwelling units. The tenants

in occupancy of such dwelling units in such a building that are

regulated pursuant to such laws and/or acts shall be offered a choice of

a one-year or two-year lease at the initial rent established by the

agency, notwithstanding any contrary provisions of, or regulations

adopted pursuant to, such laws and/or acts. The agency shall cause all

tenants in occupancy of each dwelling unit affected by this subdivision

to be notified of and have an opportunity to comment upon the

contemplated rehabilitation. Such notification shall advise such tenants

of the approximate expected rent increase and the subsequent

availability of a one-year or two-year lease. Such notification and

opportunity to comment shall be provided prior to commencement of the

rehabilitation and again after its completion before establishment of

the initial rents.

3. The supervising agency shall use its best efforts to ensure that

activities carried out pursuant to this section are structured so as to

minimize the likelihood of any involuntary economic displacement of

tenants who reside in multiple dwellings which are the subject of such

activities. However, if temporary physical displacement is required as a

direct result of rehabilitation work which is performed in the course of

the eligible rehabilitation project, suitable temporary relocation

arrangements shall be provided.

* NB Repealed June 30, 2027

§ 609 — This act shall take effect March first, nineteen hundred sixty-two

This act shall take effect March first, nineteen hundred

sixty-two.

§ 610 — Rental assistance and legal regulated rents

Rental assistance and legal regulated rents. 1. (a)

Notwithstanding the emergency tenant protection act of nineteen

seventy-four or the rent stabilization law of nineteen hundred

sixty-nine, any regulation promulgated pursuant to such act or law, or

any other provision of law, where a housing accommodation is subject to

a regulatory agreement with a state or municipal agency or public

benefit corporation, or a political subdivision of the state, and where

a federal, state, or local program provides rental assistance for such

housing accommodation, such state or municipal agency or public benefit

corporation, or political subdivision of the state, may allow in such

regulatory agreement the owner of such housing accommodation to charge

and collect a rent for such housing accommodation that (i) does not

exceed the maximum payment standard or contract rent that the rental

assistance program may provide for such housing accommodation, but (ii)

does exceed the legal regulated rent for the housing accommodation.

(b) If any such rental assistance ends upon the vacancy of the housing

accommodation, the owner of such housing accommodation shall thereafter

charge and collect a rent for such housing accommodation that does not

exceed the lesser of (i) the previously established legal regulated rent

for such housing accommodation, as adjusted by the most recent

applicable guidelines increases approved by a rent guidelines board

established pursuant to the emergency tenant protection act of nineteen

seventy-four and any other increases authorized by law, regardless of

when the previously established legal regulated rent was last charged,

and (ii) any lower rent that is required by such regulatory agreement.

(c) If any such rental assistance ends during a tenancy, including,

but not limited to, upon the renewal of a lease, the owner of such

housing accommodation shall thereafter charge and collect a rent for

such housing accommodation that does not exceed the lesser of (i) the

previously established legal regulated rent for such housing

accommodation, as adjusted by the most recent applicable guidelines

increases approved by a rent guidelines board established pursuant to

the emergency tenant protection act of nineteen seventy-four and any

other increases authorized by law, regardless of when the previously

established legal regulated rent was last charged, (ii) any rent charged

to and paid by the tenant immediately prior to the commencement of the

rental assistance that was less than the legal regulated rent for such

housing accommodation, as adjusted by such most recent applicable

guidelines increases and any other increases authorized by law, and

(iii) any lower rent that is required by such regulatory agreement.

2. Any rent charged pursuant to subdivision one of this section in

excess of the legal regulated rent for a housing accommodation shall not

be registered as the legal regulated rent pursuant to the emergency

tenant protection act of nineteen seventy-four or the rent stabilization

law of nineteen hundred sixty-nine. The owner of such housing

accommodation shall continue to register the legal regulated rent and

any preferential rent calculated according to applicable guidelines

increases applied to the previously established legal regulated rent or

preferential rent, respectively, and separately register the actual rent

charged to the tenant pursuant to subdivision one of this section.

3. Where the owner of a housing accommodation charges and collects a

rent that exceeds the legal regulated rent for such housing

accommodation pursuant to subdivision one of this section, such owner

shall provide every tenant of such housing accommodation with a notice,

attached to the initial lease and all renewal leases, advising the

tenant in plain language that if such tenant ceases to receive the

rental assistance described in subdivision one of this section for any

reason, the rent for such housing accommodation shall be the legal

regulated rent, or any lower rent as required by subdivision one of this

section. The owner shall disclose any applicable regulatory agreement

and the applicability of this section in any legal proceeding brought

against a tenant whose rent is governed by this section.

4. An owner of a housing accommodation who fails to adjust a rent upon

the termination of any such rental assistance as required by subdivision

one of this section shall refund to the tenant the amount of the

overcharge and be liable for treble damages. The tenant shall have the

right to recover such overcharges and damages from the date of their

accrual, notwithstanding any statute of limitations set forth in the

emergency tenant protection act of nineteen seventy-four or the rent

stabilization law of nineteen hundred sixty-nine. The tenant may raise

such an overcharge as a claim or defense in any court of appropriate

jurisdiction, or in a proceeding at the division of housing and

community renewal, pursuant to the emergency tenant protection act of

nineteen seventy-four or the rent stabilization law of nineteen hundred

sixty-nine.

5. Where a regulatory agreement allows an owner of a housing

accommodation to charge and collect a rent for the housing accommodation

that exceeds the legal regulated rent for such housing accommodation in

accordance with subdivision one of this section, the state or municipal

agency or public benefit corporation, or political subdivision of the

state, that has executed the regulatory agreement shall audit such

owner's records at least once every three years to verify that such

owner is complying with the provisions of this section.

§ 611 — Rent stabilization and regulatory agreements

Rent stabilization and regulatory agreements. 1.

Notwithstanding any other provision of law, including the provisions of,

or any regulation promulgated pursuant to, the emergency tenant

protection act of nineteen seventy-four or the rent stabilization law of

nineteen hundred sixty-nine, the state division of housing and community

renewal, when supervising housing accommodations under provisions of law

other than the emergency tenant protection act of nineteen seventy-four

or the rent stabilization law of nineteen hundred sixty-nine, the New

York city department of housing preservation and development, the New

York state urban development corporation, the New York state housing

finance agency, the New York state housing trust fund, and the New York

city housing development corporation, or such other state or municipal

agency, political subdivision, public benefit corporation, or

instrumentality as the state division of housing and community renewal

shall identify, may, by agreement with an owner of a multiple dwelling,

subject any housing accommodation in such multiple dwelling to the

emergency tenant protection act of nineteen seventy-four or the rent

stabilization law of nineteen hundred sixty-nine, or both, if applicable

to the municipality. The requirements of such agreement shall supplement

any requirements imposed on such housing accommodation pursuant to any

other provisions of law.

2. Any agreement between a state or municipal agency, political

subdivision, public benefit corporation, or instrumentality described in

subdivision one of this section and an owner of a multiple dwelling that

contains provisions that are consistent with subdivision one of this

section and that is in effect as of the effective date of this section

is and will remain valid and enforceable.

§ 612 — Compliance monitoring

Compliance monitoring. 1. Any supervising agency and any

corporate governmental agency that constitutes a public benefit

corporation created pursuant to this chapter shall have the power to:

(a) subpoena, require the attendance of and examine and take testimony

under oath of such persons as it deems necessary to monitor, and enforce

compliance with, a note, mortgage, other financing agreement, regulatory

agreement, deed, land disposition agreement, or restrictive covenant

with or approved by such agency or corporation and entered into in

connection with an action taken pursuant to this chapter, the general

municipal law, the real property tax law, or the New York city zoning

resolution; and (b) subpoena and require the production of books,

accounts, papers, documents and other evidence related to such

monitoring and enforcement.

2. Any person who has been issued a subpoena, or any other requirement

to testify or produce books and records, pursuant to subdivision one of

this section, shall be required to comply with such subpoena or other

requirement within a reasonable period of time established by the

supervising agency or public benefit corporation that issued such

subpoena. Each day in which a person fails to comply with such subpoena,

or with any other such requirement to testify or produce books and

records, shall constitute a separate violation of this section. The

civil penalty for each such violation shall be not more than two hundred

fifty dollars, provided that such penalty shall not apply to any period

during which such subpoena or other requirement to testify or produce

books and records is the subject of a pending judicial proceeding

commenced prior to the expiration of the period of time established by

such supervising agency or public benefit corporation for compliance

with such subpoena or other requirement to testify or produce books and

records.

3. Any such supervising agency or public benefit corporation may

promulgate rules and regulations to carry out the provisions of this

section.

§ 613 — Charges

Charges. A municipality, or a supervising agency thereunder,

may require the payment of charges by an owner in consideration for

financing, regulation, supervision and audit of loans and grants made

pursuant to the provisions of this chapter. Such charges shall be paid

into the treasury of the municipality requiring the charges and shall be

paid and deposited in the general fund of any such municipality.

§ 614 — Servicing loans

Servicing loans. An agency may make provision in a note and

loan agreement or by separate agreement for the performance of loan or

grant servicing functions, including, but not limited to, functions

related to lending or providing a grant for construction, as may

generally be performed by an institutional lender. Such agency may act

in such capacity or appoint or consent to the appointment of a financial

institution or other qualified entity, as determined by such agency, to

act in such capacity on behalf of such agency. Such agency may pay a

reasonable and customary fee to such financial institution or other

qualified entity appointed by such agency, or to whose appointment such

agency provided consent, for the performance of such loan or grant

servicing functions.

ARTICLE 12 New York City Housing Development Corporation

§ 650 — Short title

Short title. This article shall be known and may be cited as

the "New York city housing development corporation act."

§ 651 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. 1. There

continues to exist in the city of New York a seriously inadequate supply

of safe and sanitary dwelling accommodations within the financial reach

of families and persons of low income. The ordinary operations of

private enterprise cannot provide an adequate supply of such

accommodations at rentals and carrying charges which families and

persons of low income can afford. In order to encourage the investment

of private capital and provide such dwelling accommodations, provision

should be made for mortgage loans at low interest rates to housing

companies which, subject to regulation as to rents, profits, dividends

and disposition of their property, supply multiple dwelling

accommodations, and other facilities incidental or appurtenant thereto,

to such families and persons. For that purpose there should be created a

corporate governmental agency, to be known as the "New York city housing

development corporation," which, through the issuance of its bonds,

notes or other obligations to the private investing public, may attract

a broad base of investment by the greatest number of the general public

and obtain the funds necessary to make or finance the making of such

mortgage loans.

2. There also exists in the city of New York a large number of

multiple dwellings which are inadequate, unsafe or insanitary and which

can be made adequate, safe and sanitary by rehabilitation or other

improvement. Such rehabilitation or improvement cannot readily be

provided by the ordinary operations of private enterprise without public

aid in the form of low interest loans to the owners of such multiple

dwellings. In order to encourage the investment of private capital in

such rehabilitation and improvement, the agency should also be

empowered, through the issuance of its bonds, notes or other obligations

to the private investing public, to obtain the funds necessary to make

or finance the making of such low interest loans.

The necessity in the public interest for the provisions hereinafter

enacted is hereby declared as a matter of legislative determination.

§ 652 — Definitions

Definitions. As used or referred to in this article, unless a

different meaning clearly appears from the context:

1. "Corporation" shall mean the corporate governmental agency created

by section six hundred fifty-three of this article.

2. "State" shall mean the state of New York.

3. "City" shall mean the city of New York.

4. "Mayor" shall mean the mayor of the city of New York

5. "Comptroller" shall mean the comptroller of the city of New York.

6. "Commissioner of finance" shall mean the commissioner of finance of

the city of New York.

7. "Director of management and budget" shall mean the director of

management and budget of the city of New York.

8. "Department of housing preservation and development" shall mean the

department of housing preservation and development of the city of New

York.

9. "Bonds" and "notes" shall mean revenue bonds and notes

respectively, issued by the corporation pursuant to this article.

10. "Revenues" shall mean the fees and charges made or received by the

corporation, and all or any part of the moneys received in payment of

mortgage loans and interest thereon, including prepayments and other

moneys received or to be received.

11. "Operating expenses" shall mean all costs of administering the

corporation, including but not limited to salaries and wages, expenses

of administering staff functions, fees of professional consultants,

legal fees, charges incurred for servicing of mortgage loans, money

management, office rents, utility charges, costs of supplies,

furnishings, equipment, machinery and apparatus, maintenance and repair

of property and other expenses incurred in connection with the

foregoing.

12. "Maximum capital reserve fund requirement" shall mean, as of any

particular date of computation, an amount of money equal to the greatest

of the respective amounts, for the then current or any future fiscal

year of the corporation, of annual debt service of the corporation, such

annual debt service for any fiscal year being the amount of money equal

to the aggregate of (a) all interest payable during such fiscal year on

all bonds of the corporation secured by the capital reserve fund or

funds for which such requirement is to be determined, other than bonds

issued pursuant to subdivision two of section six hundred fifty-six of

this article, outstanding on said date of computation, plus (b) the

principal amount of all bonds of the corporation secured by the capital

reserve fund or funds for which such requirement is to be determined,

other than bonds issued pursuant to subdivision two of section six

hundred fifty-six of this article outstanding on said date of

computation which matures during such fiscal year, plus (c) the amount

of all annual sinking fund payments payable during such fiscal year with

respect to any bonds of the corporation secured by the capital reserve

fund or funds for which such requirement is to be determined, other than

bonds issued pursuant to subdivision two of section six hundred

fifty-six of this article, outstanding on said date of computation.

13. "Annual sinking fund payment" shall mean the amount of money

specified in the resolution authorizing term bonds as payable into a

sinking fund during a particular fiscal year for the retirement of term

bonds which mature after such fiscal year, but shall not include any

amount payable by reason only of the maturity of a bond.

* 14. "Lending institution" shall mean any bank or trust company or

savings bank, or any corporation, association or other entity which is

owned or controlled by any one or more such bank or trust company or

savings bank, or any savings and loan association, credit union, federal

national mortgage association approved mortgage banker, national banking

association, federal savings and loan association, federal savings bank,

public pension fund, pension fund with assets over fifty million

dollars, insurance company, federal credit union or other financial

institution or governmental agency of the United States which

customarily makes, purchases, holds, insures or services residential

mortgages.

* NB Effective until July 23, 2027

* 14. "Lending institution" shall mean any bank or trust company or

savings bank, or any corporation, association or other entity which is

owned or controlled by any one or more such bank or trust company or

savings bank, or any savings and loan association, industrial bank,

credit union, federal national mortgage association approved mortgage

banker, national banking association, federal savings and loan

association, pension fund, insurance company, federal credit union or

other financial institution or governmental agency of the United States

which customarily makes, purchases, holds or services residential

mortgages.

* NB Effective July 23, 2027

§ 653 — New York city housing development corporation

New York city housing development corporation. 1. There is

hereby created the "New York city housing development corporation". The

corporation shall be a corporate governmental agency, perpetual in

duration, and shall constitute a public benefit corporation. It shall

consist of seven members as follows: the commissioner of the department

of housing preservation and development, who shall serve as chairperson,

the commissioner of finance, the director of management and budget, two

public members to be appointed by the mayor and two public members to be

appointed by the governor. The public members first appointed by the

mayor or the governor, as may be the case, shall serve for terms ending

two and four years respectively from January first next succeeding the

date of their appointment. Their successors shall serve for terms of

four years each. Members shall continue in office until their successors

have been appointed and qualified. The mayor or the governor shall fill

any vacancy which may occur by reason of death, resignation or otherwise

in a manner consistent with the original appointment. A public member

may be removed by the mayor or the governor, whichever appointed such

member, for cause, but not without an opportunity to be heard in person

or by counsel, in such member's defense, upon not less than ten days'

notice.

2. (a) The members, officers and employees of the corporation shall be

subject to the conflicts of interest provisions of chapter sixty-eight

of the New York city charter and the rules promulgated thereunder by the

New York city conflicts of interest board. Such members, officers and

employees shall not be subject to the provisions of article eighteen of

the general municipal law or the provisions of sections seventy-three,

seventy-three-a and seventy-four of the public officers law.

(b) The members, officers and employees of the corporation shall be

subject to the provisions of section 12-110 of the administrative code

of the city of New York pertaining to the filing of annual disclosure

reports with the New York city conflicts of interest board, and for such

purpose the members shall be deemed to be compensated members of the

corporation.

(c) Notwithstanding any inconsistent provisions of this or any other

general, special or local law, no officer or employee of the state, or

of any civil division thereof, or of any public corporation, as defined

in the general construction law, shall be deemed to have forfeited or

shall forfeit such person's office or employment or any benefits

provided under the retirement and social security law or under any

public retirement system maintained by the state or by the civil

divisions thereof by reason of such person's acceptance of membership on

or by virtue of such person being an officer, employee or agent of the

corporation. A member shall not receive a salary or other compensation

for services rendered pursuant to this article but shall be entitled to

reimbursement for such member's actual and necessary expenses incurred

in the performance of such services. The members may engage in private

employment or in a profession or business, unless otherwise prohibited

from doing so by virtue of holding another public office, subject to the

provisions of chapter sixty-eight of the New York city charter and the

rules promulgated thereunder by the New York city conflicts of interest

board.

3. The powers of the corporation shall be vested in and exercised by

no less than four of the members thereof then in office. The corporation

may delegate to one or more of its members, officers, agents or

employees such powers and duties as it may deem proper.

4. The corporation and its corporate existence shall continue until

terminated by law; provided, however, that no such law shall take effect

so long as the corporation shall have notes, bonds, or other obligations

outstanding. Upon termination of the existence of the corporation all of

its rights and properties shall pass to and be vested in the city.

§ 654 — Powers of the corporation

Powers of the corporation. Except as otherwise limited by this

article, the corporation shall have power:

1. To sue and be sued;

2. To have a seal and alter the same at pleasure;

3. To make and alter by-laws for its organization and internal

management and, subject to agreements with noteholders or bondholders,

to make rules and regulations governing the use of its property and

facilities;

4. To make and execute contracts and all other instruments necessary

or convenient for the exercise of its powers and functions under this

article;

5. To acquire, hold and dispose of real and/or personal property for

its corporate purposes;

6. To appoint officers, agents and employees, prescribe their duties

and qualifications and fix their compensation, subject to the provisions

of the civil service law and the rules of the civil service commission

of the city;

7. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans, to participate with the city or

with one or more organizations mentioned in section fifteen of this

chapter in making mortgage loans and to undertake commitments to make

any such mortgage loans to housing companies, including any subsidiary

of the corporation, on the same terms and otherwise in accordance with

the provisions of article two of this chapter governing loans by a

municipality;

* 7-a. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans, to participate with the city or

with one or more organizations set forth in section one hundred eleven-a

of this chapter in making mortgage loans and to undertake commitments to

make any such mortgage loans to redevelopment companies organized under

article five of this chapter;

* NB (Effective until ruling by Internal Revenue Service)

* 7-a. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans, to participate with the city or

with one or more organizations set forth in sections eighty-one and one

hundred eleven-a of this chapter in making mortgage loans and to

undertake commitments to make any such mortgage loans to

limited-dividend housing companies organized under article four of this

chapter and to redevelopment companies organized under article five of

this chapter. Such mortgage loans may be made to limited-dividend and

redevelopment companies for such purposes as may be approved by the

corporation including, but not limited to, the refinancing of the

existing mortgage indebtedness of such companies, to provide funds for

the replacement, improvement and rehabilitation of the properties owned

by said companies, to provide funds for all costs incurred by such

companies relating to the refinancing of the existing mortgage

indebtedness including amounts required to establish escrow accounts,

reserves and working capital as determined by the corporation and for

such other purposes as are permitted by articles four and five of this

chapter; provided, however, such purposes must be approved by the

Federal Internal Revenue Service for application of the tax exemption

for housing bonds. Such mortgage loans may be made by the corporation

without any requirement that all or any portion of the loan be used to

create new or rehabilitated housing facilities. In furtherance of its

powers pursuant to this subdivision and, subject to the provisions of

any contract with noteholders and bondholders, the corporation may

acquire and contract to acquire, by assignment or otherwise, any

mortgage securing a loan and any related bond or note made by a

limited-dividend housing company or a redevelopment company and may

modify or satisfy such mortgage and accept or make a new mortgage or

mortgages and execute such other instruments as the corporation deems to

be necessary or proper.

* NB (Effective pending ruling by Internal Revenue Service)

8. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans including participation and

investment with the city or with one or more corporations, organizations

or individuals of the kind mentioned in section four hundred seven of

this chapter in making mortgage loans and to undertake commitments to

make mortgage loans to owners of existing multiple dwellings, including

any subsidiary of the corporation, on the same terms and otherwise in

accordance with the provisions of article eight of this chapter, except

that such loans shall in all cases be secured by a first lien;

8-a. Subject to the provisions of any contract with noteholders or

bondholders, to participate with the city or one or more private

investors as defined in section eight hundred one of this chapter or

with the city and one or more such private investors in making loans in

accordance with the provisions of article fifteen of this chapter.

9. Subject to the provisions of any contract with noteholders and

bondholders, to sell, at public or private sale, any mortgage or other

obligation securing a mortgage loan made by the corporation;

10. Subject to the provisions of any contract with noteholders and

bondholders, in connection with the making of mortgage loans and

commitments therefor, to make and collect such fees and charges,

including but not limited to reimbursement of all costs of financing by

the corporation, service charges and insurance premiums, as the

corporation shall determine to be reasonable;

11. Subject to the provisions of any contract with noteholders and

bondholders, to consent to the modification, with respect to rate of

interest, time of payment of any installment of principal or interest,

security, or any other term, of any mortgage, mortgage loan, mortgage

loan commitment, contract or agreement of any kind to which the

corporation is a party;

12. To foreclose any mortgage in default or commence any action to

protect or enforce any right conferred upon it by any law, mortgage,

contract or other agreement, and to bid for and purchase such property

at any foreclosure or at any other sale, or acquire or take possession

of any such property; and in such event the corporation may complete,

administer, pay the principal of and interest on any obligations

incurred in connection with such property, dispose of, and otherwise

deal with, such property, in such manner as may be necessary or

desirable to protect the interests of the corporation therein;

12-a. To create subsidiaries, as provided in section six hundred

fifty-four-a of this chapter.

13. To borrow money and to issue negotiable notes or bonds or other

obligations and to fund or refund the same, and to provide for the

rights of the holders of its obligations;

14. To invest any funds held in reserves or sinking funds, or any

funds not required for immediate use or disbursement, at the discretion

of the corporation, in obligations of the city, state or federal

government, obligations the principal and interest of which are

guaranteed by the city, state or federal government, obligations of

agencies of the federal government which may from time to time be

legally purchased by savings banks of the state as investments of funds

belonging to them or in their control and be approved by the

comptroller, obligations in which the comptroller of the state of New

York is authorized to invest pursuant to section ninety-eight of the

state finance law, obligations of the New York city municipal water

finance authority, participation certificates of the federal home loan

mortgage corporation or mortgage-backed securities of the federal

national mortgage association.

15. Subject to the provisions of any contract with noteholders and

bondholders and subject to the provisions of section six hundred

fifty-five of this article, to purchase notes or bonds of the

corporation;

16. To procure insurance against any loss in connection with its

property and other assets including mortgages and mortgage loans in such

amounts and from such insurers as it deems desirable;

17. To engage the services of consultants on a contract basis for

rendering professional and technical assistance and advice; and where

the corporation shall join with one or more organizations mentioned in

section fifteen, one hundred eleven-a or four hundred seven of this

chapter in making mortgage loans, to make provision, either in the

mortgage or mortgages or by separate agreement, for the performance of

such services as are generally performed by a banking organization or

insurance company which itself owns and holds a mortgage or by a trustee

under a trust mortgage, and to consent to the appointment of a banking

organization to act in such capacity;

18. To contract for and to accept any gifts or grants or loans of

funds or property or fees for administering any federal rental subsidy

contract or financial or other aid in any form, including but not

limited to mortgage insurance, from the federal government or any agency

or instrumentality thereof, or from the state or any agency or

instrumentality thereof, or from any other source and to comply, subject

to the provisions of this article, with the terms and conditions

thereof;

19. As security for the payment of the principal of and interest on

any bonds so issued and any agreements made in connection therewith, to

pledge all or any part of its revenues;

20. Notwithstanding the provisions of this chapter or of any other

law, general, special or local, whenever the corporation shall find that

the maximum rentals charged tenants of the dwellings in any project

financed by the corporation in whole or in part shall not be sufficient,

together with all other income of the mortgagor, to meet within

reasonable limits all necessary payments to be made by the mortgagor of

all expenses including fixed charges, sinking funds, reserves and

dividends, to request the mortgagor to make application to vary the

rental rate for such dwellings so as to secure sufficient income, and

upon failure of the mortgagor to take such action within thirty days

after receipt of written request from the corporation to do so, to

request the supervising agency to take action upon such agency's own

motion so to vary such rental rate, and upon failure of the supervising

agency either upon application by the mortgagor or upon its own motion

so to vary such rental rate within sixty days after receipt of written

request from the corporation to do so, to vary such rental rate by

action of the corporation;

21. Subject to the provisions of any contract with noteholders and

bondholders, to acquire and to contract to acquire, by assignment or

otherwise, or to take as collateral security, any mortgage securing a

loan, including any construction loan, and any note or bond evidencing

indebtedness thereon, made by the city of New York in accordance with

the provisions of article two of this chapter and any contract or

arrangement, including any subsidy contract or arrangement, related to

such mortgage, and the receipts to be derived from any of the foregoing,

and to assume and fulfill and contract to assume and fulfill the

obligations of the mortgagee or lender thereunder, and to reassign and

to contract to reassign to the city of New York any such mortgage, note,

bond, contract or arrangement and the receipts to be derived therefrom.

22. Subject to the provisions of any contract with noteholders and

bondholders, to assign or pledge any mortgage, bond, note, contract,

security, or arrangement and the receipts to be derived from any of the

foregoing, acquired pursuant to this section;

22-a. Subject to the provisions of any contract with noteholders and

bondholders, to acquire and to contract to acquire, by assignment or

otherwise, any mortgage securing a loan, including any construction

loan, and any note or bond evidencing indebtedness thereon, made by the

city of New York in accordance with the provisions of article two of

this chapter and any contract or arrangement, including any subsidy

contract or arrangement, related to such mortgage, and to modify or to

satisfy such mortgage and accept or make a new mortgage or mortgages and

other instruments, including mortgages to secure residual indebtedness

and instruments to evidence residual receipts obligations as defined in

section twelve of this law and to enter into amended subsidy contracts,

and (i) to hold or to sell, assign or otherwise dispose of such mortgage

or mortgages, including those made in substitution thereof and any

related instruments, contracts and arrangements, or to issue obligations

secured by such mortgage or mortgages, and pay to the city of New York

the proceeds of such sale, assignment or other disposition of such

mortgages and the proceeds from the issuance of such obligations, less

legal and other fees, costs and expenses and other amounts paid or

incurred by the corporation, including discounts, costs incurred by the

corporation related to the sale of such mortgages or to a sale, if any,

of its obligations, fees payable to other governmental units, the cost

incurred by the corporation under an agreement with the federal

government pursuant to subdivision twenty-two-b of this section, amounts

required to establish escrow accounts or reserves for the issuance of

mortgage insurance, the cost of satisfying such minimum property

standards or of installing such life safety devices as may be required

by the federal government which standards or devices are in addition to

any requirement imposed by the city of New York as mortgagee, amounts

loaned to the mortgagor to establish such escrow accounts or reserves or

to satisfy such minimum property standards or to install such life

safety devices, closing and other costs related to obtaining mortgage

insurance from the federal government such other costs as the federal

government may from time to time impose, any amounts not previously

advanced under mortgages modified or satisfied under this subdivision as

determined by the supervising agency, and an amount not to exceed twenty

million dollars at any one time, which shall be held in a revolving

account for a period not to exceed eighteen months from the time of the

first deposit therein, to pay any or all of the costs, fees and expenses

and other amounts attributable to issuing obligations secured by such

mortgage or mortgages, or to making and insuring mortgages pursuant to

this subdivision, and any balance remaining in such revolving account

shall be paid to the city of New York no later than eighteen months

after the time of the first deposit therein, and (ii) to assign or

reassign any such mortgage or mortgages, instruments and related

contract or arrangement to the city of New York. If the corporation

sells any such mortgages for an amount in excess of the principal amount

thereof at the time of such sale, or if the corporation issues

obligations secured by any such mortgages and the yield on such

mortgages is greater than the yield on such obligations (the yield on

such mortgages and obligations having been calculated in accordance with

section one hundred three of the internal revenue code of the United

States and regulations thereunder), the corporation shall pay to the

city of New York such premium and any such differential, but only to the

extent such differential is not paid to or for the benefit of the

holders of such obligations; and such premium and differential, to the

extent so paid to such city, shall be used and credited by the city of

New York in accordance with subdivision four-b of section twenty-three-a

of this chapter as if such city had sold such mortgages or issued such

obligations pursuant to section twenty-three-a of this chapter. The

corporation shall not modify or satisfy a mortgage pursuant to this

subdivision unless such modification or satisfaction is first approved

by the supervising agency.

22-b. To contract with the federal government for the sharing of any

claim paid by the federal government on account of any insurance of a

mortgage, provided that the corporation's share of any such claim shall

not exceed fifty percent of the insurance benefits paid by the federal

government, and further provided that the corporation's share of such

claims under any such contract shall not exceed five percent of the

outstanding principal amount of all mortgage loans of the corporation

insured by the federal government and included within such contract.

23. To make loans secured by mortgages insured or coinsured by the

federal government to the owners of multiple dwellings in such amounts

as may be required for the rehabilitation of such multiple dwellings or,

if such owner acquires the multiple dwelling for the purpose of such

rehabilitation or owns the multiple dwelling subject to an outstanding

indebtedness, in such amounts as may be required for the cost of such

acquisition or for the refinancing of such outstanding indebtedness, but

in no event in such amounts as would exceed the mortgage limits imposed

by the federal government, and to regulate or restrict such owner as to

rents or sales, charges, capital structure, rate of return and method of

operation and to make loans secured by mortgages insured or coinsured by

the federal government to the owners of projects in such amounts as may

be required for the acquisition, construction or improvement of such

projects, but in no event in such amounts as would exceed the mortgage

limits imposed by the federal government, or ninety percent of the

actual cost of such acquisition, construction or improvement, whichever

is less, and to regulate or restrict such owner as to rents or sales,

charges, capital structure, rate of return and method of operation. The

owner may, with the approval of the corporation, fix maximum rentals to

be charged tenants of the dwellings in any multiple dwelling or project

aided by a loan pursuant to this subdivision. The corporation, upon its

own motion, or upon application by the owner or by the federal

government, may vary such rental rate from time to time so as to secure,

together with all other income of the multiple dwelling, sufficient

income for it to meet within reasonable limits all necessary payments to

be made by the owner of all expenses; provided that no variation in a

rental rate shall be effective unless approved by the federal

government. The corporation or the department of housing preservation

and development shall notify occupants of the multiple dwelling, if

there be any, of the contemplated rehabilitation and shall advise them

of the expected rental increase to result therefrom, and a

representative of the corporation or the department of housing

preservation and development shall meet or offer to meet at least once

with the occupants. The corporation shall promulgate such rules and

regulations with respect to multiple dwellings and projects financed

pursuant to this subdivision and the owners of such multiple dwellings

and projects as may be necessary to carry out the provisions of this

subdivision, provided that such rules and regulations shall contain

provisions as to income limitations relating to admission into occupancy

of the dwelling units of such projects to the same effect as are

contained in section thirty-one of this chapter and for the dwelling

units of such other multiple dwellings to the same effect as are

contained in subdivision three of section four hundred one of this

chapter. As used in this subdivision, the term "multiple dwelling" shall

include an existing building or structure which is to be converted into

a class A multiple dwelling.

23-a. Subject to the provisions of any contract with noteholders and

bondholders, (i) to make and contract for the making of mortgage loans

for the construction or rehabilitation of projects which the New York

city housing authority has agreed to purchase on a turnkey basis in

accordance with a federally assisted program for the production of

public housing as authorized by the United States housing act of

nineteen hundred thirty-seven as amended to the date of enactment of

this subdivision of this section, upon the completion of such

construction or rehabilitation, and (ii) to make and to contract for the

making of loans to, or to purchase loans from, banking or other lending

institutions for the purpose of financing such construction or

rehabilitation.

23-b. In order to increase the availability of safe and sanitary

dwelling accommodations within the financial reach of families and

persons of low income, to acquire and to contract to acquire, by

assignment or otherwise, or to take as collateral security, any

federally guaranteed security evidencing indebtedness on a mortgage

securing a loan, including any construction loan, and the receipts to be

derived therefrom and to assign or reassign and to contract to assign or

reassign any such security and the receipts to be derived therefrom,

subject in each case, to the provisions of any contract with noteholders

and bondholders;

* 23-c. (1) Subject to the provisions of any contract with noteholders

and bondholders (a) to make and contract for the making of loans for the

acquisition, construction or rehabilitation of housing accommodations

containing five or more dwelling units (i) for the purpose of providing

housing accommodations for occupancy by persons and families for whom

the ordinary operations of private enterprise cannot provide an adequate

supply of safe, sanitary and affordable housing accommodations or (ii)

for units located in an area designated as blighted pursuant to article

fifteen or sixteen of the general municipal law, or as certified by the

New York city department of housing preservation and development as

being located in an area which is blighted, and (b) to make and to

contract for the making of loans to or to purchase loans from lending

institutions for the purpose of financing mortgage loans for such

acquisition, construction or rehabilitation, and (c) to establish such

regulatory requirements with regard to such housing accommodations as

may be deemed appropriate by the corporation to achieve the objectives

of this article, and articles fifteen and sixteen of the general

municipal law notwithstanding any other provisions of this chapter to

the contrary. Any notes and bonds issued pursuant to this subdivision

shall not be secured by any capital reserve fund established pursuant to

section six hundred fifty-six of this article.

(2) With regard to any loan made pursuant to this subdivision and

notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, or local law enacted pursuant thereto, the

rent stablization law of nineteen hundred sixty-nine, or the emergency

tenant protection act of nineteen seventy-four, the owner of a project

otherwise subject to any such law or act, with the approval of the

agency, shall establish the initial rent for each dwelling unit within

the project. The corporation shall notify occupants of the project, if

any, of any such proposed rental establishment and offer to meet at

least once with the occupants prior to its approval.

(3) The powers granted by this subdivision may be exercised only if

(a) obligations of the corporation have been issued to fund the loan

made or purchased by the corporation and such obligations have received

an investment grade rating from a recognized rating agency; (b) the loan

made or purchased by the corporation is fully secured as to principal

and interest by insurance or a commitment to insure by the state of New

York mortgage agency or New York city residential mortgage insurance

corporation or by the general credit of a bank, national bank, trust

company, savings bank, savings and loan association, insurance company,

governmental agency of the United States, or any combination thereof; or

(c) obligations of the corporation are purchased by a bank, national

bank, trust company, savings bank, savings and loan association,

insurance company, governmental agency of the United States, which for

purposes of this subdivision, include the federal home loan mortgage

corporation, the federal national mortgage association, the governmental

national mortgage association, and any successor of the foregoing, or

any wholly-owned subsidiary or combination thereof.

* NB Repealed July 23, 2027

23-d. To and shall develop, promote and ensure that, where possible,

minority groups which traditionally have been disadvantaged, and women

are afforded equal opportunity for contracts in connection with

development and construction contracts for developments, facilities and

projects financed by the issuance of bonds, notes and other obligations

of the corporation.

23-e. Subject to the provisions of any contract with noteholders and

bondholders, to refinance or acquire mortgage loans made for multiple

dwellings by private lenders pursuant to article eight-A or fifteen of

this chapter; provided that the corporation shall not be permitted

pursuant to this subdivision to acquire a mortgage loan, unless such

acquisition is in connection with a refinancing of the property for

which such mortgage loan was made.

23-f. To service mortgage loans made by private or governmental

lenders for multiple dwellings, provided that each such mortgage loan

shall have been made either (i) pursuant to this chapter, or (ii) in

conjunction with another mortgage loan made by the city of New York.

23-g. Subject to the provisions of any contract with noteholders and

bondholders, to acquire mortgage loans made by the city of New York

pursuant to article eight-A of this chapter or section ninety-nine-h or

article sixteen of the general municipal law or to acquire a

participation interest in such mortgage loans.

23-h. Subject to the provisions of any contract with noteholders and

bondholders and relating to the purpose of providing housing

accommodations for occupancy by persons and families for whom the

ordinary operations of private enterprise cannot provide an adequate

supply of safe, sanitary and affordable housing accommodations or for

units located in an area designated as blighted pursuant to article

fifteen or sixteen of the general municipal law, or as certified by the

New York city department of housing preservation and development as

being located in an area that is blighted, the corporation is hereby

authorized to carry out, by loans or guaranties, the following purposes:

(i) to preserve, repair, renovate, upgrade, improve, modernize,

rehabilitate or otherwise prolong the useful life of dwelling

accommodations;

(ii) to construct dwelling accommodations and undertake site

preparation related thereto;

(iii) to restore abandoned, vacant or occupied city or privately-owned

dwelling accommodations to habitable condition;

(iv) to assist in the acquisition of buildings that contain or are

expected to contain dwelling accommodations; and

(v) to facilitate the disposition of city-owned buildings that contain

or are expected to contain dwelling accommodations.

24. To contract with any of its subsidiary corporations to render such

services as such subsidiary corporation may request, including, but not

limited to, the use of the premises, personnel and personal property of

the corporation, and to provide for reimbursement to the corporation

from such subsidiary corporation for any expenses necessarily incurred

by the corporation in carrying out the terms of any such contract.

25. To do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

article.

§ 654-a — Subsidiaries; how created

Subsidiaries; how created. 1. The corporation by resolution

may direct any of its members, officers or employees to organize a

subsidiary corporation whenever, in the sole discretion of the

corporation, it has become necessary to acquire a project in the case of

sale under foreclosure or in lieu of foreclosure and it is beneficial to

effectuate the purpose of this chapter for the subsidiary to hold title

to the project.

2. Each such subsidiary corporation shall be wholly owned by the

corporation and shall be organized pursuant to the business corporation

law, the not-for-profit corporation law or article two or article eleven

of this chapter.

3. The corporation may transfer to any subsidiary corporation any

money, real or personal or mixed property or may convey to it any

project in order to carry out the purposes of this article. Each such

subsidiary corporation shall have all the privileges, immunities, tax

exemptions and other exemptions of the corporation to the extent the

same are not inconsistent with the statute or statutes pursuant to which

such subsidiary was incorporated. Except as may be inconsistent with the

provisions of this article, such subsidiary, if organized pursuant to

article two or article eleven of this chapter, shall have all the rights

and powers granted to housing companies by this chapter and by any other

statute pursuant to which such subsidiary corporation was organized.

4. No member or officer of the corporation shall receive any

additional compensation, either direct or indirect, other than

reimbursement for actual and necessary expenses incurred in the

performance of such person's duties, by reason of such person's serving

as a member, director, trustee or officer of any subsidiary corporation.

§ 654-b — Housing assistance corporation

Housing assistance corporation. 1. There is hereby

established a public benefit corporation known as the "housing

assistance corporation" as a subsidiary corporation of the corporation.

2. Such subsidiary corporation may (a) receive monies from the

corporation, the state, any public benefit corporation, the city, the

federal government or any other source for the purpose of assisting

rental developments to maintain rentals affordable to low and moderate

income persons for whom the ordinary operation of private enterprise

cannot supply safe, sanitary and affordable housing accommodations, (b)

transfer, lend, pledge or assign monies (i) to any rental development in

order to assist such development in maintaining rents affordable to such

low and moderate income tenants or (ii) in order to assist the

corporation in financing such developments, and (c) enter into such

agreements with the owners of such developments as it may deem

appropriate to further the objectives of this article. Such subsidiary

corporation shall have all the privileges, immunities, tax exemptions

and other exemptions of the corporation to the extent the same are not

inconsistent with this article.

3. The membership of such subsidiary corporation shall consist of the

commissioner of the department of housing preservation and development,

who shall serve as chairperson, and two public members appointed by and

who serve at the pleasure of the mayor. The powers of the subsidiary

corporation shall be vested in and exercised by no less than two of the

members thereto then in office. The subsidiary corporation may delegate

to one or more of its members, or its officers, agents and employees,

such duties and powers as it may deem proper.

4. No officer or member of the corporation shall receive any

additional compensation, either direct or indirect, other than

reimbursement for actual and necessary expenses incurred in the

performance of such person's duties, by reason of such person's serving

as a member or officer of such subsidiary corporation.

5. The corporation may transfer to such subsidiary corporation any

real, personal or mixed property in order to carry out the purposes of

this section.

6. The subsidiary corporation shall have the power to:

(a) sue and be sued;

(b) have a seal and alter the same at pleasure;

(c) make and alter by-laws for its organization and internal

management and make rules and regulations governing the use of its

property and facilities;

(d) make and execute contracts and all other instruments necessary or

convenient for the exercise of its powers and functions under this

section;

(e) acquire, hold and dispose of real or personal property for its

corporate purposes;

(f) engage the services of private consultants on a contract basis for

rendering professional and technical assistance and advice;

(g) procure insurance against any loss in connection with its

activities, properties and other assets in such amount and from such

insurers as it deems desirable;

(h) appoint officers, agents and employees, prescribe their duties and

qualifications and fix their compensation subject to the provisions of

the civil service law and the rules of the civil service commission of

the city;

(i) invest any funds, or other monies under its custody and control in

the same manner as the corporation; and

(j) to do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

section.

7. The subsidiary corporation and its corporate existence shall

continue until terminated by law. Upon termination of the existence of

the subsidiary corporation all of its rights and properties shall pass

to and be vested in the city. No such termination shall take effect as

long as obligations of the subsidiary corporation remain outstanding.

8. The city and the corporation shall have the power to transfer to

such subsidiary corporation agents, employees and facilities of the city

or corporation to enable it to fulfill the purposes of this section.

§ 654-c — Housing New York corporation

Housing New York corporation. 1. Definitions. As used in this

section, unless a different meaning clearly appears from the context:

(a) "Housing New York program" shall mean the housing New York program

established pursuant to section four of the housing New York program

act.

(b) "City" shall mean the city of New York, its agencies and

instrumentalities (other than the housing New York corporation) and the

New York city housing development corporation.

(c) "Residential housing facilities" shall mean one or more works or

improvements containing one or more residential dwelling units,

including, but not limited to, single room occupancy units, and

including the real and personal property acquired, owned, constructed,

equipped, improved, enlarged, rehabilitated or renovated to provide such

accommodations and such incidental and appurtenant commercial, social,

recreational or communal facilities, to be located without the Battery

Park project area, as defined in the Battery Park city authority act,

and within the city.

(d) "Excess revenues" shall mean all revenues from the Battery Park

project area, as defined in the Battery Park city authority act, in

excess of those needed (i) to satisfy bond and note covenants (other

than as they relate to bonds and notes issued pursuant to this section

and section one thousand nine hundred seventy-four-c of the public

authorities law) including those covenants which require that the

Battery Park city authority maintain its revenues and reserve funds in

an amount necessary to permit it to discharge its debt service

obligations, (ii) to fulfill its legal and financial commitments, and

(iii) to pay its operating and maintenance expenses.

2. There is hereby established a public benefit corporation known as

the "housing New York corporation" as a subsidiary corporation of the

corporation solely for the purpose of borrowing money and granting such

moneys to the city for the purposes and in accordance with the

provisions of the housing New York program.

3. It is hereby found and declared that the legislature, pursuant to

the housing New York program act, has established a housing New York

program under which the city will cause the acquisition, construction,

equipping, improving, rehabilitation and renovation of dwelling

accommodations within the city of New York for persons and families for

whom the ordinary operations of private enterprise cannot supply such

accommodations; that such program is necessary in order to increase the

presently inadequate supply of dwelling accommodations in such city for

such persons and families; that such program shall require a substantial

commitment of funds from public sources; and that the need for such

moneys necessitates that the subsidiary corporation created by this

section be granted the powers and be made subject to the requirements of

this section. The legislature therefore finds that such subsidiary

corporation, subject to the terms and conditions specified herein,

should be given the power to borrow funds and grant such moneys to the

city of New York, and any agency or instrumentality thereof (other than

such subsidiary corporation) or the corporation for use by such entity

in the housing New York program; that the financing of residential

housing facilities in accordance with the housing New York program is a

public purpose for which moneys may be granted, and exemptions from

taxation on the income of bonds or notes of such subsidiary corporation

and on such subsidiary corporation's income and property granted, as

specified herein; and that the powers and duties of such subsidiary

corporation as recited in this section are necessary and proper for

achieving the ends herein recited. Therefore such subsidiary corporation

is hereby authorized and empowered:

(a) to borrow money by issuing bonds and notes for the purposes of (i)

granting such moneys to the city to finance the acquisition,

construction, equipping, improvement, enlargement, rehabilitation and

renovation of residential housing facilities for the purposes and in

accordance with the provisions of the housing New York program and (ii)

refunding any bonds or notes of such subsidiary corporation issued

pursuant to this section;

(b) to grant moneys to the city for the purpose of financing the

acquisition, construction, equipping, improvement, enlargement,

rehabilitation and renovation of residential housing facilities for the

purposes and in accordance with the provisions of the housing New York

program and to enter into any agreement specifying terms and conditions

with respect thereto;

(c) subject to the provisions of any contract with the holders of any

of its bonds or notes, to pledge any revenues or assets of such

subsidiary corporation, including, but not limited to, any excess

revenues of the Battery Park city authority as shall be payable to such

subsidiary corporation pursuant to an agreement between the Battery Park

city authority and such subsidiary corporation as such subsidiary

corporation shall deem necessary, to secure any bonds or notes issued or

any agreements entered into pursuant to this section; (d) to procure

insurance, letters of credit or other credit enhancements with respect

to its bonds or notes issued pursuant to this section and to pay the

premiums and fees therefor;

(e) to adopt, amend or rescind rules and regulations appropriate to

carry out its corporate purposes and to establish such requirements and

enter into such agreements to achieve the objectives of this section;

and

(f) to exercise any and all other powers authorized by this section

and not inconsistent with the provisions of this section.

4. In addition to the foregoing, such subsidiary corporation may:

(a) receive moneys from the corporation, the Battery Park city

authority, any other public benefit corporation, the federal government

or any other source for the purpose of paying its obligations issued

pursuant to this section in order to provide residential housing

facilities to low and moderate income persons for whom the ordinary

operation of private enterprise cannot supply safe, sanitary and

affordable housing accommodations,

(b) enter into agreements with the Battery Park city authority or any

other entity for the purpose of receiving moneys as described in

paragraph (a) of this subdivision, and

(c) transfer, lend, pledge or assign moneys to a trustee, fiduciary or

similar entity for the purpose of securing obligations as referenced in

paragraph (a) of this subdivision.

5. The membership of such subsidiary corporation shall consist of

seven members, five of whom shall be members of the corporation (other

than members thereof appointed by the governor) and two of whom shall be

appointed by the governor. Neither of the two members appointed by the

governor shall be members or officers of the Battery Park city authority

or any subsidiary corporation organized pursuant to section nineteen

hundred seventy-four-a of the public authorities law. The two members

first appointed by the governor shall serve for terms of two and four

years respectively from January first next succeeding the date of their

appointment. Their successors shall serve for terms of four years each.

The governor shall fill any vacancy which may occur by reason of death,

resignation or otherwise of a member appointed by the governor in a

manner consistent with the original appointment. A member appointed by

the governor (i) shall continue in office until such member's successor

has been appointed and qualified and (ii) may be removed by the governor

for cause, but not without an opportunity to be heard in person or by

counsel, in such member's defense, upon not less than ten days' notice.

The commissioner of the department of housing preservation and

development shall serve as chairperson of the subsidiary corporation.

The powers of the subsidiary corporation shall be vested in and

exercised by no less than four of the members thereof then in office.

The subsidiary corporation may delegate to one or more of its members,

or its officers, agents and employees, such duties and powers as it may

deem proper.

6. Notwithstanding any inconsistent provisions of this or any other

general, special or local law, no officer or employee of the city or the

state, or of any public corporation, as defined in the general

construction law, shall be deemed to have forfeited or shall forfeit

such person's office or employment by reason of such person's acceptance

of membership on or by virtue of such person's being an officer,

employee or agent of the subsidiary corporation. No officer or member of

the corporation shall receive any additional salary or other

compensation, either direct or indirect, other than reimbursement for

actual and necessary expenses incurred in the performance of such

person's duties, by reason of such person's serving as a member or

officer of such subsidiary corporation.

7. The corporation may transfer to such subsidiary corporation any

real, personal or mixed property in order to carry out the purposes of

this section.

8. The subsidiary corporation also shall have the power to:

(a) sue and be sued;

(b) have a seal and alter the same at pleasure;

(c) make and alter by-laws for its organization and internal

management and make rules and regulations governing the use of its

property and facilities;

(d) make and execute contracts and all other instruments necessary or

convenient for the exercise of its powers and functions under this

section;

(e) acquire, hold and dispose of real or personal property for its

corporate purposes;

(f) engage the services of private consultants on a contract basis for

rendering professional and technical assistance and advice;

(g) procure insurance against any loss in connection with its

activities, properties and assets in such amount and from such insurers

as it deems desirable;

(h) appoint officers, agents and employees, prescribe their duties and

qualifications and fix their compensation subject to the provisions of

the civil service law and the rules of the civil service commission of

the city;

(i) invest any funds, or other moneys under its custody and control in

the same manner as the corporation; and

(j) to do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

section.

9. The subsidiary corporation and its corporate existence shall

continue until terminated by law; provided, however, that no such

termination shall take effect as long as obligations of the subsidiary

corporation remain outstanding, unless adequate provision has been made

for the payment thereof in the documents securing the same. Upon

termination of the existence of the subsidiary corporation all of its

rights and properties shall pass to and be vested in the city of New

York.

10. The city and the corporation shall have the power to transfer to

such subsidiary corporation, agents, employees and facilities of the

city or corporation to enable it to fulfill the purposes of this

section.

11. (a) Subject to the provisions of this section, the subsidiary

corporation shall have power and is hereby authorized to issue from time

to time its notes and bonds in such principal amount as the subsidiary

corporation shall determine to be necessary to provide sufficient funds

for achieving its corporate purposes, including the providing of moneys

to the city, the payment of interest on notes and bonds of the

subsidiary corporation, the establishment of reserves to secure such

notes and bonds, and the payment of all expenses of the subsidiary

corporation incident thereto.

(b) The subsidiary corporation shall have the power, from time to

time, to issue (i) notes to renew notes and (ii) bonds to pay notes,

including the interest thereon and, whenever it deems refunding

expedient, to refund any bonds by the issuance of new bonds, whether the

bonds to be refunded have or have not matured, and to issue bonds partly

to refund bonds then outstanding and partly for any of its corporate

purposes. The refunding bonds may be exchanged for the bonds to be

refunded or sold and the proceeds applied to the purchase, redemption or

payment of such bonds.

(c) Except as may otherwise be expressly provided by the subsidiary

corporation, every issue of its notes and bonds shall be general

obligations of the subsidiary corporation payable out of any revenues of

such corporation, subject only to any agreements with the holders of

particular notes or bonds pledging any particular revenues.

(d) The notes and bonds shall be authorized by resolution or

resolutions of the subsidiary corporation, shall bear such date or dates

and shall mature at such time or times as such resolution or resolutions

may provide, except that no note or any renewal thereof shall mature

more than nine years after the date of issue of the original note and no

bond shall mature more than fifty years from the date of its issue. No

refunding bonds shall mature later than fifty years from the date of

original issuance of the bonds being refunded. The bonds may be issued

as serial bonds payable in annual installments or as term bonds or as a

combination thereof. The notes and bonds shall bear interest at such

rate or rates, be in such denominations, be in such form, either coupon

or registered, carry such registration privileges, be executed in such

manner, be payable in such medium of payment, at such place or places,

and be subject to such terms of redemption as such resolution or

resolutions may provide. The notes and bonds may be sold by the

subsidiary corporation at public or private sale, at such price or

prices as the subsidiary corporation shall determine; provided, however,

that the subsidiary corporation shall consult with the comptroller of

the city of New York as to the timing of any sale; and provided further

that no notes or bonds of the subsidiary corporation may be sold at a

private sale unless such sale and the terms thereof have been approved

in writing by (a) such comptroller, where such sale is not to such

comptroller, or (b) the director of the budget of the city of New York,

where such sale is to such comptroller.

(e) Any resolution or resolutions authorizing any notes or bonds or

any issue thereof may contain provisions, which shall be a part of the

contract or contracts with the holders thereof, as to:

(i) pledging all or any part of the revenues to secure the payment of

the notes or bonds or of any issue thereof, subject to such agreements

with noteholders or bondholders as may then exist; (ii) pledging all or

any part of the assets of the subsidiary corporation to secure the

payment of the notes or bonds or of any issue of notes or bonds, subject

to such agreements with noteholders or bondholders as may then exist;

(iii) the setting aside of reserves or sinking funds and the

regulation and disposition thereof;

(iv) limitations on the purpose to which the proceeds of sale of notes

or bonds may be applied and pledging such proceeds to secure the payment

of the notes or bonds or of any issue thereof;

(v) limitations on the issuance of additional notes or bonds; the

terms upon which additional notes or bonds may be issued and secured;

and the refunding of outstanding or other notes or bonds;

(vi) the procedure, if any, by which the terms of any contract with

noteholders or bondholders may be amended or abrogated, the amount of

notes or bonds the holders of which must consent thereto, and the manner

in which such consent may be given;

(vii) limitations on the amount of moneys to be expended by the

subsidiary corporation for operating expenses of the subsidiary

corporation;

(viii) vesting in a trustee or trustees such property, rights, powers

and duties in trust as the subsidiary corporation may determine, which

may include any or all of the rights, powers and duties of the trustee

appointed by the bondholders pursuant to this section and limiting or

abrogating the right of the bondholders to appoint a trustee under this

section or limiting the rights, powers and duties of such trustee;

(ix) the acts or omissions to act which shall constitute a default in

the obligations and duties of the subsidiary corporation to the holders

of the notes or bonds and providing for the rights and remedies of the

holders of the notes or bonds in the event of such default, including

the right to appointment of a receiver; providing, however, that such

rights and remedies shall not be inconsistent with the general laws of

the state and the other provisions of this section; and

(x) any other matters, of like or different character, which in any

way affect the security or protection of the holders of the notes or

bonds.

(f) Any pledge made by the subsidiary corporation shall be valid and

binding from the time when the pledge is made; the revenues or property

so pledged and thereafter received by the subsidiary corporation shall

immediately be subject to the lien of such pledge without any physical

delivery thereof or further act, and the lien of any such pledge shall

be valid and binding as against all parties having claims of any kind in

tort, contract or otherwise against the subsidiary corporation,

irrespective of whether such parties have notice thereof. Neither the

resolution nor any other instrument by which a pledge is created need be

recorded.

(g) Neither the members of the subsidiary corporation nor any other

person executing such notes or bonds shall be subject to any personal

liability or accountability by reason of the issuance thereof.

(h) The subsidiary corporation, subject to such agreements with

noteholders or bondholders as may then exist, shall have power out of

any funds available therefor, to purchase notes or bonds of the

subsidiary corporation which shall thereupon be cancelled.

(i) In the discretion of the subsidiary corporation, the bonds may be

secured by a trust indenture by and between the subsidiary corporation

and a corporate trustee, which may be any trust company or bank having

the powers of a trust company in the state. Such trust indenture may

contain such provisions for protecting and enforcing the rights and

remedies of the bondholders as may be reasonable and proper and not in

violation of law, including covenants setting forth the duties of the

subsidiary corporation in relation to the exercise of its corporate

powers and the custody, safeguarding and application of all moneys. The

subsidiary corporation may provide by such trust indenture for the

payment of the proceeds of the bonds and the revenues to the trustee

under such trust indenture or other depository, and for the method of

disbursement thereof, with such safeguards and restrictions as it may

determine. If the bonds shall be secured by a trust indenture, the

bondholders shall have no authority to appoint a separate trustee to

represent them.

(j) Whether or not the notes and bonds are of such form and character

as to be negotiable instruments under the terms of the uniform

commercial code, the notes and bonds are hereby made negotiable

instruments within the meaning of and for all the purposes of the

uniform commercial code, subject only to the provisions of the notes and

bonds for registration.

12. No moneys may be borrowed by issuing bonds or notes to finance

residential housing facilities pursuant to this section unless such

subsidiary corporation has entered into an agreement or agreements with

the mayor on behalf of the city and with the Battery Park city

authority, which provide, in addition to any other terms and conditions,

that:

(a) such residential housing facilities are to provide dwelling

accommodations which are to be occupied by persons and families for whom

the ordinary operations of private enterprise cannot provide an adequate

supply of safe, sanitary and affordable housing accommodations;

(b) unless otherwise specifically provided by law, neither the state

nor the authority are to have any responsibility as to the financing of

such residential housing facilities and neither the state, the authority

nor the subsidiary corporation are to have any responsibility as to the

operation, maintenance, repair or use of such facilities;

(c) the city shall use the moneys granted to it pursuant to this

section to finance residential housing facilities in accordance with the

provisions of the housing New York program and shall comply with the

terms and conditions of the housing New York program act and this

section; and

(d) the timing, amount, maturity schedule and all other terms and

conditions of any issuance of bonds or notes by the subsidiary

corporation pursuant to this section, will provide for the Battery Park

city authority's requirements as to the development, management or

operation of the project and the effect of such terms and conditions on

the availability of excess revenues and the pledge or assignment

thereof.

13. Commencing on or before January thirty-first, nineteen hundred

eighty-seven, and on or before January thirty-first of each year

thereafter during which the city utilizes moneys which are provided to

it pursuant to this section, such subsidiary corporation shall, for the

prior and current calendar year, submit a report to the governor, the

temporary president of the senate, the speaker of the assembly, the

minority leader of the senate, the minority leader of the assembly, the

mayor and the comptroller, which shall include, but not be limited to,

the total principal amount of bonds and notes which have been and are

expected to be issued pursuant to this section and a copy of any

agreement and any amendments thereto among such subsidiary corporation,

the Battery Park city authority and the city pursuant to subdivision

twelve of this section. Such report may be a part of any other report

that such subsidiary corporation is required to make.

14. For the purposes of financing the acquisition, construction,

equipping, improvement, enlargement, rehabilitation and renovation of

residential housing facilities pursuant to this section, such subsidiary

corporation may borrow money by issuing bonds or notes in an aggregate

principal amount not exceeding four hundred million dollars plus a

principal amount of bonds or notes issued (i) to fund any related debt

service reserve fund, (ii) to provide capitalized interest, and (iii) to

provide fees and other charges and expenses, including underwriters'

discount, related to the issuance of such bonds or notes and the

maintenance of such reserves, all as determined by such subsidiary

corporation, excluding bonds or notes issued to refund outstanding bonds

or notes issued pursuant to this section. Any bonds or notes of such

subsidiary corporation shall not be or be deemed to be obligations of

the corporation or subject to or included in any authorization of or

limitation on indebtedness of the corporation.

In computing the total principal amount of bonds or notes that may at

any time be issued for any purpose under this section, the amount of the

outstanding bonds or notes that constitutes interest under the United

States Internal Revenue Code of nineteen hundred fifty-four, as amended

to the effective date of this section, shall be excluded.

15. The state does hereby pledge to and agree with the holders of any

bonds or notes issued under this section that the state will not limit

or alter the rights hereby vested in such subsidiary corporation or the

Battery Park city authority to fulfill the terms of any agreements made

with or for the benefit of the said holders thereof, or in any way

impair the rights and remedies of such holders until such bonds or

notes, together with the interest thereon, with interest on any unpaid

installments of interest, and all costs and expenses in connection with

any action or proceeding by or on behalf of such holders, are fully met

and discharged. Such subsidiary corporation is authorized to include

this pledge and agreement of the state in any agreement with the holders

of such bonds or notes.

16. The bonds or notes of such subsidiary corporation shall not be a

debt of either the state of New York, the city of New York, the Battery

Park city authority or the corporation, and neither the state, the city

of New York, such authority nor the corporation shall be liable thereon,

nor shall they be payable out of any funds other than those of such

subsidiary corporation; and such bonds or notes shall contain on the

face thereof a statement to such effect.

17. The subsidiary corporation established pursuant to this section

shall have all the privileges, immunities, tax exemptions and other

exemptions of the corporation to the extent the same are not

inconsistent with this section.

§ 654-d — Residential mortgage insurance corporation

Residential mortgage insurance corporation. 1. Definitions.

As used in this section, the following words and terms shall have the

following meanings unless the context shall indicate another or

different meaning or intent:

(a) "Cash equivalent". A letter of credit, insurance policy, surety,

guarantee, indemnity or other security arrangement.

(b) "Financial institution". (i) Any bank, trust company, national

bank, state or federal savings bank, state or federal savings and loan

association, or state or federal credit union, insurance company,

pension fund or retirement system of any corporation, association, any

other entity which is owned or controlled by any one or more of the

above, provided such bank, trust company, national bank, state or

federal savings bank, state or federal savings and loan association, or

state or federal credit union, insurance company, pension fund or

retirement system of any corporation or association, and, if an entity

which is owned by one or more of the above, such entity, is supervised

by or responsible to any agency of the federal government, the state,

any department thereof or the governing body of any city, town or

village of the state, or (ii) any other entity approved by the

subsidiary corporation, or (iii) any one or more of the above when

lawfully acting as a trustee or otherwise in a fiduciary capacity. The

term "financial institution" shall also include the New York state

housing finance agency, the New York state medical care facilities

finance agency, the state of New York mortgage agency, the New York

state urban development corporation, the corporation, the New York city

department of housing preservation and development, the community

preservation corporation, any governmental agency of the United States

which customarily makes, purchases or holds residential mortgages and

any person who is approved as a mortgage lender by the federal housing

administration for purposes of insurance issued by such administration

or licensed by the state of New York as a mortgage banker.

(c) "Housing accommodation". Any existing building, structure, unit

thereof (including an owner-occupied unit in a condominium and a

lessee-occupied dwelling unit in which the lessee retains a proprietary

lease with respect to such dwelling unit and has an allocable ownership

interest in a cooperative housing corporation) or unimproved real

property, which is used or occupied, or is intended to be used or

occupied as the home or residence of one or more persons, a portion of

which may also be used for commercial and other community facilities

ancillary to such residence provided that, in the case of any housing

accommodation consisting of more than six dwelling units, the floor area

of above-ground commercial facilities shall not exceed one-quarter of

the above-ground floor area of such housing accommodation (inclusive of

such commercial facilities).

(d) "Housing insurance contracts". All contracts entered into by the

subsidiary corporation to insure mortgages pursuant to this section, but

not including (i) any contracts to insure mortgages entered into by the

predecessor corporation which are imposed upon and assumed by the

subsidiary corporation pursuant to paragraph (d) of subdivision two of

this section, or (ii) any contracts to insure mortgages entered into by

the subsidiary corporation with respect to which a commitment to insure

was issued by the predecessor corporation.

(e) "Housing insurance fund". The housing insurance fund as

established pursuant to subdivision twelve of this section.

(f) "Housing insurance fund requirement". As of any particular date of

computation, an amount equal to the aggregate of (i) one hundred per

centum of the insured amounts due and payable by the subsidiary

corporation pursuant to housing insurance contracts, plus (ii) twenty

per centum of the insured amounts under housing insurance contracts

other than insured amounts which are due and payable pursuant to (i)

above, plus (iii) twenty per centum of the amounts to be insured under

housing insurance contracts pursuant to the subsidiary corporation's

commitments to insure.

(g) "Mortgage". A first mortgage on real property located within the

city of New York, securing a preservation loan or a rehabilitation loan,

with a term not to exceed forty years, on real estate, held in fee

simple or on a leasehold under a lease having a period of years to run

at the time a mortgage is insured under this section of at least twenty

per centum greater duration than the remaining term of such mortgage;

the term "first mortgage" means such first liens as are commonly given

to secure advances on, or the unpaid purchase price of, real estate

under the laws of the state, together with the credit instruments, if

any, secured thereby.

(h) "Mortgage insurance contracts". All contracts to insure mortgages

entered into by the predecessor corporation that are imposed upon and

assumed by the subsidiary corporation pursuant to paragraph (d) of

subdivision two of this section and all contracts to insure mortgages

entered into by the subsidiary corporation with respect to which a

commitment to insure was issued by the predecessor corporation.

(i) "Mortgage insurance fund". The mortgage insurance fund as

established pursuant to subdivision twelve of this section.

(j) "Mortgage insurance fund requirement". As of any particular date

of computation, an amount equal to the aggregate of (i) one hundred per

centum of the insured amounts due and payable by the subsidiary

corporation pursuant to mortgage insurance contracts, plus (ii) an

amount equal to the greater of (A) seven million five hundred thousand

dollars or (B) twenty per centum of the insured amounts under mortgage

insurance contracts other than insured amounts which are due and payable

under subparagraph (i) of this paragraph, plus (iii) twenty per centum

of the amounts to be insured under the predecessor corporation's

commitments to insure; provided, however, that notwithstanding the

foregoing, at no time shall the mortgage insurance fund requirement

exceed the aggregate of (1) insured amounts due and payable by the

subsidiary corporation pursuant to mortgage insurance contracts, plus

(2) one hundred per centum of the insured amounts under mortgage

insurance contracts other than insured amounts which are due and payable

under clause (1) of this paragraph, plus (3) one hundred per centum of

the amounts to be insured under the predecessor corporation's

commitments to insure.

(k) "Mortgagee". The mortgage lender under a mortgage insured by the

predecessor corporation or insured pursuant to subdivision ten of this

section, and its successors and assigns.

(l) "Mortgage loan". A mortgage loan secured by a mortgage.

(m) "Mortgagor". The original borrower under a mortgage loan insured

by the predecessor corporation or insured pursuant to subdivision ten of

this section, and its successors and assigns.

(n) "Multi-family housing accommodation". A housing accommodation with

five or more dwelling units.

(o) "Operating expenses". All costs of administering the subsidiary

corporation, including, but not limited to, salaries and wages, expenses

of administering staff functions, fees of professional consultants,

legal fees, charges incurred for servicing of mortgage loans, money

management fees, office rents, utility charges, costs of supplies,

furnishings, equipment, machinery and apparatus, maintenance and repair

of property, payment to the corporation for services rendered, amounts

due and owing under contracts validly entered into by the predecessor

corporation or the subsidiary corporation, other than mortgage insurance

contracts and housing insurance contracts, respectively, and other

expenses incurred in connection with any of the foregoing.

(p) "Other real property". Any building, structure or unimproved

property which is used or occupied, or is intended to be used or

occupied, primarily for emergency, transitional or shelter housing, a

portion of which may also be used for commercial and other community

facilities ancillary to such use provided that, the floor area of

above-ground commercial facilities shall not exceed one-quarter of the

above-ground floor area of such other real property (inclusive of such

commercial facilities).

(q) "Predecessor corporation". The New York city rehabilitation

mortgage insurance corporation created by section one of chapter nine

hundred twenty-four of the laws of nineteen hundred seventy-three,

being, prior to repeal, article fourteen of the private housing finance

law.

(r) "Preservation loan". A mortgage loan extended by a financial

institution with a term not to exceed forty years for the purposes of

refinancing existing indebtedness secured by one or more mortgages on a

housing accommodation or other real property located within the city of

New York and/or financing the acquisition of a housing accommodation or

other real property located within the city of New York and which

otherwise complies with the conditions established pursuant to

subdivision ten of this section.

(s) "Rehabilitation". Repairs, alterations or improvements of a

housing accommodation or other real property designed to raise the

housing standards therein or, in the case of other real property,

designed to provide needed improvements therein. Rehabilitation shall

also include the construction of a housing accommodation or other real

property.

(t) "Rehabilitation loan". A mortgage loan extended by a financial

institution with a term not to exceed forty years which may include the

refinancing of existing indebtedness, if any, secured by one or more

mortgages on the housing accommodation or other real property to be

rehabilitated, or financing the acquisition of the housing accommodation

or other real property to be rehabilitated, which housing accommodation

or other real property shall be located within the city of New York and

which otherwise complies with the conditions established pursuant to

subdivision ten of this section, provided, however, that a sum equal to

at least twenty-five percent of the amount of the mortgage loan shall be

used for the cost of rehabilitation of, or construction of improvements

on, a housing accommodation or other real property.

2. New York city residential mortgage insurance corporation. (a) There

is hereby established a public benefit corporation known as the "New

York city residential mortgage insurance corporation" as a subsidiary

corporation of the corporation. The purpose of such subsidiary

corporation shall be to insure mortgage loans in order to promote the

preservation of neighborhoods which are blighted, are becoming blighted

or may become blighted, to discourage disinvestment and encourage the

investment of mortgage capital in such neighborhoods and to provide

safe, sanitary and affordable housing accommodations to persons and

families for whom the ordinary operations of private enterprise cannot

supply such accommodations.

(b) The subsidiary corporation shall be the successor to the

predecessor corporation.

(c) All property and rights of the predecessor corporation (other than

moneys of the predecessor corporation) are hereby passed to and vested

in the subsidiary corporation, subject, however, to all outstanding

contracts of insurance, commitments to insure mortgages, and all

outstanding obligations of the predecessor corporation. All moneys of

the predecessor corporation (including, but not limited to, amounts held

in the mortgage insurance fund established pursuant to section seven

hundred nine of this chapter, prior to said section being repealed) and

all moneys held in the remic premium reserve fund established pursuant

to said section seven hundred nine shall be transferred to the city;

provided that as a condition to said transfer, a like amount of money

shall be transferred from the corporation to the subsidiary corporation

to be deposited into the mortgage insurance fund, the housing insurance

fund and the remic premium reserve fund (all established pursuant to

subdivision twelve of this section) in such amounts as shall be

determined by the subsidiary corporation, subject to the provisions of

paragraph (a) of subdivision twelve of this section.

(d) All debts, liabilities, obligations, contracts, agreements, and

covenants of the predecessor corporation (including, but not limited to,

contracts of insurance and commitments to insure mortgages) are hereby

imposed upon and shall be assumed by the subsidiary corporation. All

persons having claims under any contracts of insurance or commitments to

insure mortgages entered into with the predecessor corporation may

enforce those claims against the subsidiary corporation in the same

manner as they might have against the predecessor corporation, and the

rights and remedies of such persons shall not be limited or restricted

in any manner by this section. The foregoing notwithstanding, the debts,

liabilities, obligations, contracts, agreements and covenants of the

predecessor corporation shall not be imposed upon the corporation. All

persons having claims under any contracts of insurance or commitments to

insure mortgages entered into with the predecessor corporation shall

have no right to enforce those claims in any manner against the

corporation.

(e) In continuing the functions and carrying out the contracts,

obligations and duties of the predecessor corporation, the subsidiary

corporation is hereby authorized to act in its own name or in the name

of the predecessor corporation as may be convenient or advisable.

(f) All regulations of the predecessor corporation shall continue to

be in effect as the regulations of the subsidiary corporation until

amended, supplemented or rescinded by the subsidiary corporation in

accordance with law.

3. Assistance; privileges. (a) The subsidiary corporation may receive

moneys from the corporation, the state, any public benefit corporation,

the city, the federal government or any other source for public purposes

set forth in this section.

(b) The subsidiary corporation may contract for and accept any gifts

or grants or loans of funds or property or financial or other aid in any

form from the federal government or any agency or instrumentality

thereof, or from the state or any agency or instrumentality thereof,

including the city and the corporation, or from any other source, public

or private, and to comply, subject to the provisions of this section,

with the terms and conditions thereof.

(c) The city and the corporation are each hereby authorized to, but

neither is required to, make gifts, grants or loans of funds or property

or financial or other aid in any form to the subsidiary corporation and

to enter into any contracts or other agreements with the subsidiary

corporation, on such terms and conditions as the city or the

corporation, as applicable, and the subsidiary corporation may agree

upon, all in furtherance of the public purposes set forth in this

section.

(d) All domestic corporations or associations organized for the

purpose of carrying on business in this state, public benefit

corporations, public employee pension funds and any other persons,

corporations or associations are hereby authorized to make contributions

to the subsidiary corporation.

(e) The subsidiary corporation shall have all the privileges,

immunities, tax exemptions and other exemptions of the corporation to

the extent the same are not inconsistent with this section.

4. Membership. The membership of such subsidiary corporation shall

consist of nine members, seven of whom shall be members of the

corporation and two of whom shall be appointed by the mayor. The members

who are not members of the corporation shall serve for terms ending two

and four years respectively from January first next succeeding the date

of their appointment. The successors of the members who are not members

of the corporation shall serve for terms of four years each. A member

who is not a member of the corporation shall continue in office until

his or her successor has been appointed and qualified. With respect to

any member who is not a member of the corporation, the mayor shall fill

any vacancy which may occur by reason of death, resignation or otherwise

for the remaining unexpired term of such member. A member who is not a

member of the corporation may be removed by the mayor for cause, but not

without an opportunity to be heard in person or by counsel, in such

member's defense, upon not less than ten days' notice. The powers of the

subsidiary corporation shall be vested in and exercised by no less than

five of the members thereof then in office. The subsidiary corporation

may delegate to one or more of its members, or its officers, agents and

employees, such duties and powers as it may deem proper. The

commissioner of the department of housing preservation and development

shall serve as chairperson of the subsidiary corporation. The president

of the corporation shall serve as president of the subsidiary

corporation.

5. Compensation. Notwithstanding any inconsistent provisions of this

or any other general, special or local law, no officer or employee of

the corporation, the city or the state, or of any public corporation, as

defined in the general construction law, shall be deemed to have

forfeited or shall forfeit such person's office or employment or any

benefits provided under the retirement and social security law or under

any public retirement system maintained by the state or by the civil

divisions thereof by reason of such person's acceptance of membership on

or by virtue of such person's being an officer, employee or agent of the

subsidiary corporation. The members may engage in private employment or

in a profession or business, unless otherwise prohibited from doing so

by virtue of holding another public office, subject to the provisions of

article eighteen of the general municipal law. For the purposes of such

article eighteen, the subsidiary corporation shall be a "municipality"

and a member shall be a "municipal officer". No member of the subsidiary

corporation shall receive additional compensation, either direct or

indirect, other than reimbursement for actual and necessary expenses

incurred in the performance of such person's duties, by reason of such

person serving as a member of the subsidiary corporation.

6. Transfer of resources. The city and the corporation shall have the

power to, but shall not be obligated to, transfer to the subsidiary

corporation such agents, employees and facilities, including any real

and/or personal property, in order to carry out the purposes of this

section.

7. Termination. The subsidiary corporation and its corporate existence

shall continue until terminated by law; provided, however, that no such

law shall take effect so long as the subsidiary corporation shall have

contracts to insure mortgages (including mortgage insurance contracts

and housing insurance contracts), commitments to insure, notes, bonds,

or other obligations outstanding, unless adequate provision has been

made for the payment thereof. Upon termination of the existence of the

subsidiary corporation all of its rights and properties shall pass to

and be vested in the corporation.

8. Powers. The subsidiary corporation shall have the power:

(a) To sue and be sued;

(b) To have a seal and alter the same at pleasure;

(c) To make and alter by-laws for its organization;

(d) To adopt, amend or rescind rules and regulations appropriate to

carry out its corporate purposes, including rules and regulations

governing the use of its property and facilities and to establish such

requirements and enter into such agreements to achieve the objectives of

this section;

(e) To make and execute contracts and all other instruments necessary

or convenient for the exercise of its powers and functions under this

section;

(f) To acquire, hold and dispose of real and/or personal property for

its corporate purposes;

(g) To engage the services of private consultants on a contract basis

for rendering professional and technical assistance and advice;

(h) To appoint officers, agents and employees, prescribe their duties

and qualifications and fix their compensation;

(i) To invest any funds, or other moneys under its custody and control

in the same manner as the corporation;

(j) To establish and levy fees and charges in connection with the

processing of applications for mortgage insurance and fix premium

charges for mortgage insurance;

(k) To enter into commitments to insure mortgages and contracts of

insurance and enter into any additional agreements as the subsidiary

corporation deems appropriate to further the objectives of this section;

(l) To fulfill its obligations and enforce its rights under any

contract of insurance, or commitment to insure so furnished as provided

in this section and such rules and regulations as may be adopted by the

subsidiary corporation;

(m) To pay, pursue to final collection, compromise, waive or release

any right, title, claim, lien or demand, however acquired, including any

equity or right of redemption;

(n) To foreclose any mortgage in default or commence any action to

protect or enforce any right conferred upon it by any law, mortgage,

contract or other agreement, and to bid for and purchase such property

at any foreclosure or at any other sale, or otherwise to acquire or take

possession of any such property;

(o) To deal with, hold, administer, manage, rent, repair, insure or

sell, lease or otherwise dispose of any property conveyed to or acquired

by the subsidiary corporation and to enter into agreements with the

state, the city, or any person, firm, entity, partnership or

corporation, either public or private, with regard thereto;

(p) To procure insurance against any loss in connection with its

property and other assets and to procure reinsurance in connection with

its obligations, all in such amounts and from such insurers as it deems

necessary or desirable;

(q) To consent to the modification, with respect to rate of interest,

time of payment of any installment of principal or interest, security or

any other term, of any mortgage, mortgage loan, contract or agreement of

any kind which the subsidiary corporation has insured or to which the

subsidiary corporation is a party;

(r) To sell, at public or private sale, any mortgage, mortgage

participation or other obligation held by the subsidiary corporation;

(s) To procure cash equivalents for deposit in its funds;

(t) To enter into co-insurance agreements with any entity authorized

by law to provide mortgage insurance with respect to property located

within the city of New York, including, but not limited to the state of

New York mortgage agency and the United States department of housing and

urban development;

(u) To do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

section.

9. Classification of housing accommodations. The subsidiary

corporation may classify housing accommodations within the city and

approve any of such classes as eligible for insurance pursuant to this

section and enact separate guidelines dealing with the provision and

extent of such insurance.

10. Insurance of mortgage loans. (a) The subsidiary corporation is

authorized, subject to the provisions of this section, to make

commitments to insure and to contract to insure mortgage loans eligible

for insurance hereunder.

(b) The subsidiary corporation shall limit its insurance on a

rehabilitation or preservation loan to an amount not in excess of fifty

per centum of the outstanding principal indebtedness, provided, however,

that the subsidiary corporation may insure an amount not in excess of

seventy-five per centum of the outstanding principal indebtedness of a

rehabilitation loan if it shall find that the extent of rehabilitation

is sufficient to justify such additional insurance, provided further,

however, that the subsidiary corporation may insure an amount not to

exceed the full outstanding principal indebtedness of a rehabilitation

or preservation loan when such mortgage loan has been made by a public

benefit corporation of the state of New York which public benefit

corporation has issued or will issue bonds or notes, some or all of the

proceeds of which bonds or notes were used or will be used to make such

mortgage loan, or when the mortgage loan has been made by a public

employee pension fund. The foregoing notwithstanding, the sum of the

percentage of any mortgage loan insured by the subsidiary corporation

and the percentage of such loan insured or to be insured by any other

party shall not exceed one hundred per centum of the outstanding

principal indebtedness of such mortgage loan.

(c) The subsidiary corporation shall not issue a commitment to insure

or a housing insurance contract unless upon the issuance thereof amounts

on deposit in the housing insurance fund will at least equal the housing

insurance fund requirement.

(d) Except for mortgage insurance contracts and except as otherwise

provided in paragraph (e) of this subdivision, the subsidiary

corporation shall not issue a commitment to insure nor shall it insure

any mortgage loan unless it shall first find (i) that the property which

is the security for such mortgage loan is located in a neighborhood

within the city of New York characterized by a deficiency of available

mortgage financing; (ii) that such deficiency has caused or threatens to

cause undermaintained and deteriorating housing accommodations and

substandard and unsanitary neighborhoods; (iii) that the granting of

such mortgage loan will aid in the preservation or rehabilitation of the

neighborhood in which such property is located; (iv) that, if the

property which is the security for such mortgage loan is other real

property, the granting of such mortgage loan will assist in preventing

the deterioration of residential housing in the neighborhood in which

such property is located; and (v) that the property which is the

security for such loan meets such other requirements as the subsidiary

corporation may from time to time establish by guidelines adopted by the

subsidiary corporation. Any such determination by the subsidiary

corporation shall be conclusive and final and shall not be subject to

review of any kind or nature or in any manner whatsoever and shall not

give rise to any liability on the part of the subsidiary corporation.

(e) The subsidiary corporation may issue a commitment to insure and

may insure any mortgage loans, notwithstanding the criteria set forth in

subparagraph (i), (ii), (iii) or (iv) of paragraph (d) of this

subdivision provided that it shall find the property which is the

security for such mortgage loan or mortgage loans is either: (i) located

within the city of New York in an empire zone designated pursuant to

article eighteen-B of the general municipal law, or (ii) will provide

safe, sanitary and affordable housing for persons and families for whom

the ordinary operations of private enterprise cannot supply such

housing, or (iii) the entity providing the mortgage financing was or is

created by local, state or federal legislation and certifies to the

subsidiary corporation that the housing accommodations or other real

property are located within the city of New York and meet the program

criteria applicable to such entity. In addition, the subsidiary

corporation may enter into any mortgage insurance contract,

notwithstanding the criteria set forth in subparagraph (i), (ii), (iii)

or (iv) of paragraph (d) of this subdivision provided that with respect

to such mortgage insurance contract, a commitment to insure shall have

been previously issued by the predecessor corporation.

(f) The subsidiary corporation may issue a commitment to insure and

may insure an existing mortgage loan, when an application for such

mortgage insurance has been submitted prior to the making of such

mortgage loan, and significant circumstances beyond the reasonable

control of the mortgagor and mortgagee necessitate the making of the

mortgage loan prior to the issuance of the commitment to insure and when

it is determined by the subsidiary corporation that such mortgage loan

would not have been made except for the reasonable expectation that the

subsidiary corporation would insure the mortgage loan.

(g) To be eligible for insurance under this section, a mortgage loan

shall be a preservation loan and/or a rehabilitation loan and (i) bear

interest, exclusive of premium charges fixed by the subsidiary

corporation, at a rate not in excess of the rate of interest authorized

by law and not in excess of a maximum rate of interest established by

the subsidiary corporation from time to time. In making its

determination of appropriate maximum interest rate, the subsidiary

corporation shall take into account the rates of interest prevalent in

the mortgage market, current data on secondary market yields and

discount and/or premium levels; (ii) unless the subsidiary corporation

in its sole discretion shall otherwise determine, provide for

substantially equal and constant periodic payments of principal and

interest in amounts sufficient to pay all interest and effect full

repayment of principal within the term of the mortgage loan; (iii)

contain terms with respect to the prepayment, insurance, repairs,

alterations, payment of taxes, special assessments, service charges,

default reserves, delinquency charges, foreclosure proceedings,

additional and secondary liens, and such other matters as the subsidiary

corporation may in its discretion prescribe; (iv) be accompanied by

certificates, issued by such officers of the mortgagee, independent

appraisers or other persons as the subsidiary corporation may require,

certifying that: (A) where appropriate, the annual income to be derived

from the property equals not less than one hundred five per centum of

the annual charges and expenses, including provision for reserves,

satisfactory to the subsidiary corporation, for the amortization of

subordinate mortgage loans over the remaining terms of such mortgage

loans regardless of whether the terms of such subordinate mortgage loans

include scheduled amortization of principal; (B) the remaining useful

life of the property is greater than the term of the mortgage; and (C)

the housing accommodation or other real property does not contain any

substantial violations of the housing maintenance code or the multiple

dwelling law, except that in the case of a mortgage loan made to the

owner of a housing accommodation or other real property containing any

such violations, the subsidiary corporation may insure or commit to

insure such mortgage loan if the mortgagee and the owner have submitted

a plan, satisfactory to the subsidiary corporation to eliminate such

violations; and (v) satisfy such additional terms and conditions as the

subsidiary corporation may prescribe.

(h) In addition to the conditions set forth in paragraphs (d) through

(g) in this subdivision, the subsidiary corporation shall not insure nor

issue a commitment to insure any rehabilitation loan unless it shall

find (i) that rehabilitation is necessary to upgrade the property, (ii)

that rehabilitation will not necessitate more than a minimum amount of

relocation of the residents of any housing accommodation and (iii) that

the rehabilitation undertaken with the proceeds of the rehabilitation

loan has been completed.

(i) A financial institution may request insurance by written

application to the subsidiary corporation in such form and manner,

together with such information and documents, as the subsidiary

corporation may prescribe. No application shall be complete unless and

until the financial institution has paid such processing fees and other

charges as the subsidiary corporation may impose in connection

therewith. The subsidiary corporation shall signify its acceptance of

such application for insurance by issuance of a commitment to insure or

a contract of insurance.

(j) The subsidiary corporation shall not issue a commitment to insure

a mortgage loan extended by the corporation unless such commitment to

insure is approved by at least two members of a committee composed of

the chairperson of the subsidiary corporation and the members of the

subsidiary corporation who are not members of the corporation.

11. Payment of insurance. The subsidiary corporation shall establish

procedures to be followed by a mortgagee in the event of a default under

the terms of any mortgage insured by the subsidiary corporation,

provided, however, any modification to such procedures (other than to

cure any ambiguity, defect or omission) shall apply only to mortgages

for which commitments have been issued after the effective date of such

modification. The subsidiary corporation may establish prerequisites for

payment of an insurance claim, including, but not limited to, requiring

the mortgagee to take such actions with respect to the property securing

the defaulted mortgage as may be specified by the subsidiary corporation

to be satisfactory evidence of a continuing default, including but not

limited to the following actions: (i) becoming lawfully the mortgagee in

possession thereof; (ii) causing a receiver to be appointed of such

property; (iii) obtaining voluntary conveyance of the mortgagor's right

and title to such property; or (iv) obtaining by foreclosure clear and

unencumbered title to such property, all in such manner as the

subsidiary corporation may require. Following submission of a valid

claim, the subsidiary corporation shall pay an amount which shall not

exceed the lesser of: (A) the then outstanding principal amount of the

mortgage multiplied by the per centum of such outstanding amount insured

by the subsidiary corporation plus that per centum of the mortgagee's

cost arising from the default, inclusive of public liens and delinquent

and unpaid interest, all as the subsidiary corporation may from time to

time allow, which per centum shall not exceed the per centum of the

outstanding principal indebtedness insured by the subsidiary corporation

or (B) the insured amount of the mortgage loan at the date of execution

of the contract of insurance or its latest amendment, if any, except

that the subsidiary corporation shall pay the greater of the two amounts

on claims by a public employee pension fund or by a public benefit

corporation from mortgage loans financed by the sale of notes or bonds

issued by said corporation and such amount payable may, if so provided

in the contract of insurance, include accrued interest to the date of

redemption for such bonds or notes and any cost associated with such

redemption, provided that no more than the actual loss suffered by such

public benefit corporation or public employee pension fund shall be

paid. Such payment may be made by the subsidiary corporation in a lump

sum, or in partial payments made within such period of time, not in

excess of two years, as may be agreed to between the subsidiary

corporation and the mortgagee, all in accordance with procedures to be

established by the subsidiary corporation. The subsidiary corporation

shall have the power to bid for and purchase the property securing the

defaulted mortgage at any foreclosure or other sale of such property, or

to otherwise acquire or take possession of such property in accordance

with other provisions of law. In the event of any such purchase,

acquisition, or taking of possession, the subsidiary corporation shall

have the power to complete, administer, sell, dispose of, and otherwise

deal with such property, in such manner as may be necessary or desirable

to protect the interests of the subsidiary corporation.

12. Mortgage insurance fund, housing insurance fund and remic premium

reserve fund. (a) The subsidiary corporation shall create and establish

a fund to be known as the "mortgage insurance fund" which shall be used

as a revolving fund for carrying out the provisions of this section with

respect to mortgage insurance contracts and shall, upon its creation,

pay into such fund moneys made available to the subsidiary corporation

from the corporation in an amount equal to the mortgage insurance fund

requirement as of such date for the purpose of such fund, and shall

thereafter, pay into such fund, upon receipt, (i) such portion of

mortgage insurance contract premium payments in an amount equal to the

amount necessary to be transferred to the mortgage insurance fund in

order that the amount on deposit therein be equal to the mortgage

insurance fund requirement (or such lesser amount as may be available);

(ii) such portion of the proceeds received by the subsidiary corporation

in connection with the exercise of such subsidiary corporation's rights

under any mortgage insurance contract in an amount equal to the amount

necessary to be transferred to the mortgage insurance fund in order that

the amount on deposit therein be equal to the mortgage insurance fund

requirement (or such lesser amount as may be available); (iii) any

moneys appropriated, paid or otherwise made available by the city or the

corporation for the purpose of such fund; and (iv) any other moneys

which may be made available to the subsidiary corporation for the

purpose of such fund from any other source. All moneys held in the

mortgage insurance fund, except as hereinafter provided, shall be used,

as required, solely for the payment of the subsidiary corporation's

liabilities arising from mortgage insurance contracts; provided,

however, that moneys in such fund shall not be withdrawn therefrom at

any time in such amount as would reduce the amount of such fund to less

than the mortgage insurance fund requirement, except for the purposes of

paying such liabilities, as the same become due and for the payment of

which other moneys of the subsidiary corporation are not available. Any

income or interest earned by, or increment to, the mortgage insurance

fund due to the investment thereof or any amount in excess of the

mortgage insurance fund requirement shall be transferred at least

annually by the subsidiary corporation to the remic premium reserve fund

or, at the written direction of the chairperson, to such other funds or

accounts of the subsidiary corporation to the extent it does not reduce

the amount of the mortgage insurance fund below the mortgage insurance

fund requirement.

(b) The subsidiary corporation shall create and establish a fund to be

known as the "housing insurance fund" which shall be used as a revolving

fund for carrying out the provisions of this section with respect to

housing insurance contracts and shall, upon its creation, pay into such

fund any moneys or cash equivalents made available to the subsidiary

corporation from the corporation for the purpose of such fund, and shall

thereafter, pay into such fund, upon receipt, (i) such portion of

housing insurance contract premium payments in an amount equal to the

amount necessary to be transferred to the housing insurance fund in

order that the amount on deposit therein be equal to the housing

insurance fund requirement (or such lesser amount as may be available);

(ii) such portion of the proceeds received by the subsidiary corporation

in connection with the exercise of such subsidiary corporation's rights

under any housing insurance contract in an amount equal to the amount

necessary to be transferred to the housing insurance fund in order that

the amount on deposit therein be equal to the housing insurance fund

requirement (or such lesser amount as may be available); (iii) any

moneys or cash equivalents appropriated, paid or otherwise made

available by the city, the federal government or the corporation for the

purpose of such fund; and (iv) any other moneys or cash equivalents

which may be made available to the subsidiary corporation for the

purpose of such fund from any other source. All moneys or cash

equivalents held in the housing insurance fund, except as hereinafter

provided, shall be used, as required, solely for the payment of the

subsidiary corporation's liabilities arising from housing insurance

contracts; provided, however, that moneys or cash equivalents in such

fund shall not be withdrawn therefrom at any time in such amount as

would reduce the amount of such fund to less than the housing insurance

fund requirement, except for the purpose of paying such liabilities, as

the same become due and for the payment of which other moneys of the

subsidiary corporation are not available. Any income or interest earned

by, or increment to, the housing insurance fund due to the investment

thereof or any amount in excess of the housing insurance fund

requirement shall be transferred at least annually by the subsidiary

corporation to the remic premium reserve fund or at the written

direction of the chairperson, to such other funds or accounts of the

subsidiary corporation to the extent it does not reduce the amount of

the housing insurance fund below the housing insurance fund requirement.

(c) The subsidiary corporation shall create and establish such

accounts within the housing insurance fund as may be necessary or

desirable for its corporate purposes.

(d) The subsidiary corporation shall create and establish a fund to be

known as the "remic premium reserve fund" for the purpose of providing

for payment of the subsidiary corporation's liabilities arising from its

operations, its mortgage insurance contracts and its housing insurance

contracts and shall, upon its creation, pay into such fund moneys or

cash equivalents made available to the subsidiary corporation from the

corporation for the purpose of such fund, and shall thereafter, pay into

such fund, upon receipt, (i) the balance of the premium payments, if

any, received by the subsidiary corporation with respect to mortgage

insurance contracts and housing insurance contracts after making the

deposits described in subparagraph (i) of paragraph (a) and subparagraph

(i) of paragraph (b) respectively, of this subdivision; (ii) the balance

of any proceeds received by the subsidiary corporation in connection

with the exercise of such subsidiary corporation's rights under any

mortgage insurance contract or housing insurance contract after making

the deposits described in subparagraph (ii) of paragraph (a) and

subparagraph (ii) of paragraph (b) respectively of this subdivision;

(iii) any moneys or cash equivalents appropriated, paid or otherwise

made available by the city, the federal government or the corporation

for the purpose of such fund; and (iv) any other moneys or cash

equivalents which may be made available to the subsidiary corporation

for the purpose of such fund from any other source.

(e) The subsidiary corporation shall create and establish such

accounts within the remic premium reserve fund as may be necessary for

its corporate purposes.

(f) Except as otherwise provided in this section, all moneys received

by the subsidiary corporation shall be deposited in the remic premium

reserve fund.

(g) If the remic premium reserve fund is funded in whole or in part

with cash, the moneys in such fund shall be deposited in one or more

banks or trust companies designated, in manner provided by law, as

depositories of the funds of the subsidiary corporation. The subsidiary

corporation may invest any moneys in such fund in the same manner as

moneys of the corporation may be invested, provided that such

obligations shall be payable within such time as the proceeds may be

needed to meet expenditures estimated to be incurred by the subsidiary

corporation. Any interest earned or capital gain realized on the money

so deposited or invested shall accrue to and become part of such fund.

The separate indentity of such fund shall be maintained whether its

assets consist of cash or investments or both.

(h) The subsidiary corporation shall transfer from the remic premium

reserve fund such moneys as the subsidiary corporation, by its

chairperson, shall certify are required for the subsidiary corporation

to pay its operating expenses, to pay any liabilities arising from the

subsidiary corporation's mortgage insurance contracts and housing

insurance contracts, and to restore the mortgage insurance fund and the

housing insurance fund to the mortgage insurance fund requirement and

housing insurance fund requirement, respectively.

(i) The subsidiary corporation shall keep a separate account for the

remic premium reserve fund. Such account shall show (i) the date and

amount of each sum paid into the fund, (ii) the interest earned by the

fund, (iii) the capital gains or losses resulting from the sale of

investments of the fund, (iv) the interest or capital gains which have

accrued to the fund, (v) the amount and date of each withdrawal from the

fund, and (vi) the assets of the fund indicating the cash balance

therein and a schedule of the amounts invested.

(j) In computing the amount of the mortgage insurance fund, the

housing insurance fund and the remic premium reserve fund for the

purposes of this section, securities in which all or a portion of such

funds shall be invested shall be valued at par, if purchased at par, or

if purchased at other than par, at amortized value. Amortized value,

when used with respect to securities purchased at a premium above or a

discount below par or if purchased at par, or if purchased at other than

par, shall mean the value as of any given date obtained by dividing the

total premiums or discount at which such securities were purchased by

the number of interest payments remaining to maturity on such securities

after such purchase and by multiplying the amount so calculated by the

number of interest payment dates having passed since the date of such

purchase; and (i) in the case of securities purchased at a premium by

deducting the product thus obtained from the purchase price, and (ii) in

the case of securities purchased at a discount by adding the product

thus obtained to the purchase price.

(k) The subsidiary corporation shall create and establish such other

fund or funds as may be necessary or desirable for its corporate

purposes.

13. Charges and fees. (a) The subsidiary corporation shall fix a

premium charge for its insurance of mortgages pursuant to this section

which shall not be less than the minimum amount nor more than the

maximum amount that the state of New York mortgage agency is permitted

to charge pursuant to applicable provisions of law.

(b) The subsidiary corporation may establish and levy such other

charges and fees in connection with applications for mortgage insurance

and insurance commitments as it may deem appropriate and necessary.

(c) Such premium charges and other charges shall be payable by the

mortgagor in cash in such manner as may be prescribed by the subsidiary

corporation.

(d) Such premium charges and other charges and fees shall not be

deemed to be interest for the purposes of section 5-501 of the general

obligations law.

14. Assistance by the corporation. The corporation is hereby

authorized to perform such functions and services in connection with any

lawful corporate purpose of the subsidiary corporation as shall be

requested by the subsidiary corporation. The subsidiary corporation

shall pay to the corporation from any moneys of the subsidiary

corporation available for such purposes such amounts as are necessary to

pay the corporation for the services rendered by the corporation

pursuant to this section.

15. Assistance by the department of housing preservation and

development. The commissioner of housing preservation and development

and the department of housing preservation and development are hereby

authorized to perform such functions and services in connection with any

lawful corporate purpose of the subsidiary corporation as shall be

requested by the subsidiary corporation. The subsidiary corporation

shall pay to the department of housing preservation and development from

any moneys of the subsidiary corporation available for such purposes

such amounts as are necessary to reimburse the department of housing

preservation and development for the services provided pursuant to this

section.

16. Annual report. The subsidiary corporation shall submit to the

mayor, the comptroller, the director of management and budget and the

corporation within ninety days after the end of its fiscal year, a

complete and detailed report setting forth: (i) its operations and

accomplishments; (ii) its receipts and expenditures during such fiscal

year in accordance with the categories or classifications established by

the subsidiary corporation for its operating and capital outlay

purposes; and (iii) its assets and liabilities at the end of its fiscal

year, including a schedule of mortgages which have been insured during

such year, the status of the mortgage insurance fund, housing insurance

fund and other reserve or special funds established by the subsidiary

corporation.

17. Moneys of the subsidiary corporation. (a) All moneys of the

subsidiary corporation, except as otherwise authorized or provided in

this section, shall be deposited as soon as practicable in a separate

account or accounts in banks or trust companies organized under the laws

of the state or national banking association, in each case doing

business in the city. The moneys in such accounts shall be paid out on

checks signed by such officer or employee of the subsidiary corporation

as the subsidiary corporation shall authorize. All deposits of such

moneys shall, if required by the subsidiary corporation, be secured by

obligations of the United States or of the state or of the city of a

market value equal at all times to the amount of the deposit and all

banks and trust companies are authorized to give such security for such

deposits.

(b) The subsidiary corporation shall prescribe a system of accounts.

(c) The comptroller, or the comptroller's legally authorized

representative, is hereby authorized and empowered from time to time to

examine the books and accounts of the subsidiary corporation including

its receipts, disbursements, contracts, reserve funds, sinking funds,

investments, and any other matters relating to its financial standing.

Such an examination shall be conducted by the comptroller at least once

in every five years; the comptroller is authorized, however, to accept

from the subsidiary corporation, in lieu of such an examination, an

external examination of its books and accounts made at the request of

the subsidiary corporation.

(d) The subsidiary corporation shall submit to the mayor, the

comptroller and the corporation within thirty days of the receipt

thereof by the subsidiary corporation a copy of the report of every

external examination of the books and accounts of the subsidiary

corporation other than copies of the reports of such examinations made

by the comptroller.

18. Rentals. Notwithstanding the provisions of, or any regulation

promulgated pursuant to, the emergency housing rent control law, the

local emergency housing rent control act or local law enacted pursuant

thereto, all dwelling units in a multiple dwelling the rehabilitation of

which commenced after July first, nineteen hundred seventy-seven and

which is financed by a mortgage loan insured by the subsidiary

corporation (including, but not limited to, mortgage loans insured

pursuant to mortgage insurance contracts and housing insurance

contracts), except for dwelling units occupied by reason of ownership of

stock in a cooperative and except for dwelling units that constitute

condominiums, shall be subject to the rent stabilization law of nineteen

hundred sixty-nine, beginning immediately after initial rents, as

established under applicable provisions of this chapter, section four

hundred twenty-one-a of the real property tax law, section four hundred

eighty-nine of the real property tax law and/or subparagraph (m) of

paragraph one of subdivision g of section 26-405 of the administrative

code of the city of New York for such dwelling units to become effective

on the basis of such rehabilitation, provided that any occupant in

possession of a dwelling unit that first becomes subject to the rent

stabilization law of nineteen hundred sixty-nine pursuant to this

section shall be offered a two-year lease notwithstanding any contrary

provisions of, or regulations adopted pursuant to, such rent

stabilization law, at the initial rent established for such dwelling

unit and provided further that such dwelling units, other than those

dwelling units, the initial rents of which are established under

subparagraph (m) of paragraph one of subdivision g of section 26-405 of

the administrative code of the city of New York, shall remain subject to

the rent stabilization law in accordance with the provisions of this

chapter, section four hundred twenty-one-a of the real property tax law

and/or section four hundred eighty-nine of the real property tax law as

the case may be. Except to the extent to which dwelling units, which are

controlled under other provisions of law, become subject to the rent

stabilization law of nineteen hundred sixty-nine pursuant to the

preceding sentence, no dwelling unit shall become subject to the rent

stabilization law solely by reason of insurance of a mortgage loan by

the subsidiary corporation.

19. Employees of the subsidiary corporation. (a) Notwithstanding any

inconsistent provisions of this section, the appointment and promotion

of all employees of and for the subsidiary corporation shall be made in

accordance with the provisions of the civil service law under the

jurisdiction of the city civil service commission and the compensation

for such employees shall be fixed by the subsidiary corporation.

(b) The city, the corporation and the predecessor corporation shall

have the power to provide for the transfer to the subsidiary corporation

of agents, employees and facilities of the city, the corporation or the

predecessor corporation, as the case may be, to enable the subsidiary

corporation to fulfill its corporate purposes. Employees of the city,

the corporation or the predecessor corporation to be transferred to the

subsidiary corporation pursuant to this section shall be eligible for

such transfer and appointment to offices and positions of the subsidiary

corporation without further examination, and all such employees who have

been appointed to positions in city service in accordance with the

provisions of the civil service law under the rules of the city civil

service commission shall have the same status with respect thereto in

the service of the subsidiary corporation as they had in city service.

Employees who are members or beneficiaries of any existing pension or

retirement system shall continue to have such rights, privileges,

obligations or status with respect to such system or systems as are

prescribed by law on the date this section takes effect, and all such

employees who have been appointed to positions in city service in

accordance with the provisions of the civil service law under the rules

of the city civil service commission shall have the same status with

respect thereto in the service of the corporation as they had in city

service.

20. Subsidiaries; how created. (a) The subsidiary corporation by

resolution may direct any of its members, officers or employees to

organize a subsidiary of the subsidiary corporation whenever, in the

sole discretion of the subsidiary corporation, it has become necessary

to acquire one or more housing accommodations or other real property in

the case of sale under foreclosure or in lieu of foreclosure and it is

beneficial to effectuate the purpose of this chapter for the subsidiary

of the subsidiary corporation to hold title to such housing

accommodations or other real property.

(b) Each such subsidiary of the subsidiary corporation shall be wholly

owned by the subsidiary corporation and shall be organized pursuant to

the business corporation law, the not-for-profit corporation law or

article two or article eleven of this chapter.

(c) The subsidiary corporation may transfer to any subsidiary of the

subsidiary corporation any money, real and/or personal property or may

convey to it any housing accommodation or other real property in order

to carry out the purposes of this article. Each such subsidiary of the

subsidiary corporation shall have all the privileges, immunities, tax

exemptions and other exemptions of the subsidiary corporation to the

extent the same are not inconsistent with the statute or statutes

pursuant to which such subsidiary of the subsidiary corporation was

incorporated. Except as may be inconsistent with the provisions of this

article, such subsidiary, if organized pursuant to article two or

article eleven of this chapter, shall have all the rights and powers

granted to housing companies by this chapter and by any other statute

pursuant to which such subsidiary of the subsidiary corporation was

organized.

(d) No member or officer of the subsidiary corporation shall receive

any additional compensation, either direct or indirect, other than

reimbursement for actual and necessary expenses incurred in the

performance of such person's duties, by reason of such person serving as

a member, director, trustee or officer of any subsidiary of the

subsidiary corporation.

§ 655 — Notes and bonds of the corporation

Notes and bonds of the corporation. 1. (a) Subject to the

provisions of section six hundred fifty-six of this article, the

corporation shall have power and is hereby authorized to issue from time

to time its negotiable notes and bonds in conformity with applicable

provisions of the uniform commercial code in such principal amount as

the corporation shall determine to be necessary to provide sufficient

funds for achieving its corporate purposes, including the making of

mortgage loans, the payment of interest on notes and bonds of the

corporation, the establishment of reserves to secure such notes and

bonds, and the payment of all operating expenses of the corporation

incident to or necessary or convenient to carry out its corporate

purposes and powers.

(b) The corporation shall have the power, from time to time, to issue

(i) notes to renew notes and (ii) bonds to pay notes, including the

interest thereon and, whenever it deems refunding expedient, to refund

any bonds by the issuance of new bonds, whether the bonds to be refunded

have or have not matured, and to issue bonds partly to refund bonds then

outstanding and partly for any of its corporate purposes. The refunding

bonds may be exchanged for the bonds to be refunded or sold and the

proceeds applied to the purchase, redemption or payment of such bonds.

(c) Except as may otherwise be expressly provided by the corporation,

every issue of its notes and bonds shall be general obligations of the

corporation payable out of any revenues of the corporation, subject only

to any agreements with the holders of particular notes or bonds pledging

any particular revenues.

2. The notes and bonds shall be authorized by resolution or

resolutions of the corporation, shall bear such date or dates and shall

mature at such time or times as such resolution or resolutions may

provide, except that no note or any renewal thereof shall mature more

than five years, and in the case of any note or any renewal thereof

issued for the purposes of making mortgage loans shall mature more than

nine years, after the date of issue of the original note and no bond

shall mature more than fifty years from the date of its issue. The

bonds may be issued as serial bonds payable in annual installments or as

term bonds or as a combination thereof. The notes and bonds shall bear

interest at such rate or rates, be in such denominations, be in such

form, either coupon or registered, carry such registration privileges,

be executed in such manner, be payable in such medium of payment, at

such place or places, and be subject to such terms of redemption as such

resolution or resolutions may provide. The notes and bonds may be sold

by the corporation at public or private sale, at such price or prices as

the corporation shall determine; provided, however, that the corporation

shall consult with the comptroller as to the timing of any sale; and

provided further that no notes or bonds of the corporation may be sold

at a private sale unless such sale and the terms thereof have been

approved in writing by (a) the comptroller, where such sale is not to

the comptroller, or (b) the director of the budget, where such sale is

to the comptroller.

3. Any resolution or resolutions authorizing any notes or bonds or any

issue thereof may contain provisions, which shall be a part of the

contract or contracts with the holders thereof, as to:

(a) pledging all or any part of the revenues to secure the payment of

the notes or bonds or of any issue thereof, subject to such agreements

with noteholders or bondholders as may then exist;

(b) pledging all or any part of the assets of the corporation,

including mortgages and obligations securing the same, to secure the

payment of the notes or bonds or of any issue of notes or bonds, subject

to such agreements with noteholders or bondholders as may then exist;

(c) the use and disposition of the gross income from mortgages owned

by the corporation and payment of principal of mortgages owned by the

corporation;

(d) the setting aside of reserves or sinking funds and the regulation

and disposition thereof;

(e) limitations on the purpose to which the proceeds of sale of notes

or bonds may be applied and pledging such proceeds to secure the payment

of the notes or bonds or of any issue thereof;

(f) limitations on the issuance of additional notes or bonds; the

terms upon which additional notes or bonds may be issued and secured;

and the refunding of outstanding or other notes or bonds;

(g) the procedure, if any, by which the terms of any contract with

noteholders or bondholders may be amended or abrogated, the amount of

notes or bonds the holders of which must consent thereto, and the manner

in which such consent may be given;

(h) limitations on the amount of moneys to be expended by the

corporation for operating expenses of the corporation;

(i) vesting in a trustee or trustees such property, rights, powers and

duties in trust as the corporation may determine, which may include any

or all of the rights, powers and duties of the trustee appointed by the

bondholders pursuant to this article, and limiting or abrogating the

right of the bondholders to appoint a trustee under this article or

limiting the rights, powers and duties of such trustee;

(j) the acts or omissions to act which shall constitute a default in

the obligations and duties of the corporation to the holders of the

notes or bonds and providing for the rights and remedies of the holders

of the notes or bonds in the event of such default, including the right

to appointment of a receiver; providing, however, that such rights and

remedies shall not be inconsistent with the general laws of the state

and the other provisions of this article;

(k) any other matters, of like or different character, which in any

way affect the security or protection of the holders of the notes or

bonds.

3-a. Any resolution or resolutions authorizing any notes or bonds or

any issue thereof shall contain provisions, which shall be a part of the

contract or contracts with the holders thereof, ensuring that no

mortgage loan shall be made by the corporation from the proceeds of such

notes or bonds or issue thereof unless the estimated revenues from the

mortgaged property, including any subsidies, shall be sufficient in

amount to secure repayment of the loan and the interest thereon and to

pay all other necessary expenses of the mortgagor relating to such

property.

4. Any pledge made by the corporation shall be valid and binding from

the time when the pledge is made; the revenues or property so pledged

and thereafter received by the corporation shall immediately be subject

to the lien of such pledge without any physical delivery thereof or

further act, and the lien of any such pledge shall be valid and binding

as against all parties having claims of any kind in tort, contract or

otherwise against the corporation, irrespective of whether such parties

have notice thereof. Neither the resolution nor any other instrument by

which a pledge is created need be recorded.

5. Neither the members of the corporation nor any other person

executing such notes or bonds shall be subject to any personal liability

or accountability by reason of the issuance thereof.

6. The corporation, subject to such agreements with noteholders or

bondholders as may then exist, shall have power out of any funds

available therefor, to purchase notes or bonds of the corporation, which

shall thereupon be cancelled, at a price not exceeding

(a) if the notes or bonds are then redeemable, the redemption price

then applicable plus accrued interest to the next interest payment date

thereon, or

(b) if the notes or bonds are not then redeemable, the redemption

price applicable on the first date after such purchase upon which the

notes or bonds become subject to redemption plus accrued interest to

such date.

7. In the discretion of the corporation, the bonds may be secured by a

trust indenture by and between the corporation and a corporate trustee,

which may be any trust company or bank having the powers of a trust

company in the state. Such trust indenture may contain such provisions

for protecting and enforcing the rights and remedies of the bondholders

as may be reasonable and proper and not in violation of law, including

covenants setting forth the duties of the corporation in relation to the

exercise of its corporate powers and the custody, safeguarding and

application of all moneys. The corporation may provide by such trust

indenture for the payment of the proceeds of the bonds and the revenues

to the trustee under such trust indenture or other depository, and for

the method of disbursement thereof, with such safeguards and

restrictions as it may determine. All expenses incurred in carrying out

such trust indenture may be treated as a part of the operating expenses

of the corporation. If the bonds shall be secured by a trust indenture,

the bondholders shall have no authority to appoint a separate trustee to

represent them.

8. Whether or not the notes and bonds are of such form and character

as to be negotiable instruments under the terms of the uniform

commercial code, the notes and bonds are hereby made negotiable

instruments within the meaning of and for all the purposes of the

uniform commercial code, subject only to the provisions of the notes and

bonds for registration.

§ 655-a — Authorization of contracts for taxation by the United States of interest on obligations guaranteed thereby

Authorization of contracts for taxation by the United States

of interest on obligations guaranteed thereby. The corporation is hereby

authorized and empowered, from time to time and at any time to enter

into a contract or contracts with the United States, acting through any

department, officer, agency, or instrumentality thereof, (a) pursuant to

which the United States (i), unconditionally guarantees the payment,

when due, of the interest on, and the principal of, bonds, notes, or

other obligations issued or to be issued by the corporation or (ii) pays

a portion of the interest payable on such bonds, notes, or other

obligations issued or to be issued by the corporation and (b) in

consideration of which the corporation covenants and consents that the

interest on such bonds, notes, or other obligations shall be includible

under the internal revenue code of nineteen hundred fifty-four or any

subsequent corresponding internal revenue law of the United States in

the gross income of the holder or holders of such bonds, notes, or other

obligations to the same extent and in the same manner that the interest

on bills, bonds, notes or other obligations of the United States is

includible in the gross income of the holder or holders thereof under

said internal revenue code or any such subsequent law. The corporation

is hereby futher authorized and empowered to include in such bonds,

notes, or other obligations and any documents related thereto such

reference to, or summary of, the contract or contracts as shall be

satisfactory to such department, officer, agency, or instrumentality of

the United States. The powers herein conferred shall be in addition to

the powers conferred by any other law and such powers shall not be

subject to the limitations or restrictions of any other law, but nothing

contained herein or in any such contract or contracts shall be construed

to covenant or consent, or to authorize any covenant or consent, to the

application of any other provision of any other law, federal or state,

to the corporation or to such bonds, notes, or other obligations, or to

the elimination or modification in any way of any other exemption

(including without limitation exemption from taxation under section six

hundred sixty-three of this article), privilege, or immunity thereof.

§ 656 — Reserve funds and appropriations

Reserve funds and appropriations. 1. a. The corporation shall

create and establish special funds (herein referred to as capital

reserve funds) and shall pay into such a capital reserve fund (1) any

moneys appropriated and made available by the state or city for the

purpose of such fund, (2) any proceeds of sale of notes or bonds, to the

extent provided in the resolution or resolutions of the corporation

authorizing the issuance thereof, and (3) any other moneys which may be

made available to the corporation for the purpose of such fund from any

other source or sources. All moneys held in a capital reserve fund,

except as hereinafter provided, shall be used, as required, solely for

the payment of the principal of bonds as the same mature or the annual

sinking fund payments, the purchase or redemption of bonds, the payment

of interest on bonds or the payment of any redemption premium required

to be paid when such bonds are redeemed prior to maturity; provided,

however, that moneys in such fund shall not be withdrawn therefrom at

any time in such amount as would reduce the amount of such fund to less

than the maximum capital reserve fund requirement, except for the

purposes of paying interest on bonds, principal of bonds and annual

sinking fund payments, as the same become due and for the payment of

which other moneys of the corporation are not available. Any income or

interest earned by, or increment to, a capital reserve fund due to the

investment thereof or any amount in excess of the maximum capital

reserve fund requirement may be transferred by the corporation to other

funds or accounts of the corporation to the extent it does not reduce

the amount of such capital reserve fund below the maximum capital

reserve fund requirement.

b. The corporation shall not issue bonds at any time if upon issuance

the amount in the capital reserve fund will be less than the maximum

capital reserve fund requirement, unless the corporation, at the time of

issuance of such bonds, shall deposit in such fund from the proceeds of

the bonds so to be issued, or otherwise, an amount which, together with

the amount then in such fund, will not be less than the maximum capital

reserve fund requirement.

c. No bonds or notes of the corporation shall be issued if upon such

issuance the aggregate principal amount of bonds and notes of the

corporation then outstanding exceeds the lesser of twenty-two billion

dollars or such amount as would cause the maximum capital reserve fund

requirement to exceed eighty-five million dollars; provided that, in

determining such aggregate principal amounts there shall be deducted:

(i) all sums then available for the payment of such bonds or notes

either at maturity or through the operation of a sinking fund; (ii) the

aggregate principal amount of outstanding bonds issued: (a) to refund

notes; and (b) to refund bonds, theretofore issued and then outstanding;

and (iii) the aggregate principal amount of outstanding notes issued to

renew notes theretofore issued and then outstanding. The provisions of

the prior sentence notwithstanding, the corporation shall not issue

bonds if such issuance shall cause the maximum reserve fund requirement

to exceed thirty million dollars unless prior to such issuance the

senate and assembly shall have adopted a concurrent resolution passed by

the votes of a majority of all the members elected to each such house

and, subsequent thereto, the governor shall evidence in writing the

governor's agreement with such resolution to the chairperson of the

corporation, which resolution shall be in full force and effect on the

date of issuance of the bonds, permitting the maximum capital reserve

fund requirement to equal or exceed the amount of the maximum capital

reserve fund requirement which would be effective upon the issuance of

the bonds in question, but in no event shall the maximum capital reserve

fund requirement exceed eighty-five million dollars.

d. In computing the amount of a capital reserve fund for the purposes

of this section, securities in which all or a portion of such fund shall

be invested shall be valued at par if purchased at par or if purchased

at other than par, at amortized value. Amortized value, when used with

respect to securities purchased at a premium above or a discount below

par, shall mean the value as of any given date obtained by dividing the

total premium or discount at which such securities were purchased by the

number of interest payments remaining to maturity on such securities

after such purchase and by multiplying the amount so calculated by the

number of interest payment dates having passed since the date of such

purchase; and (i) in the case of securities purchased at a premium by

deducting the product thus obtained from the purchase price, and (ii) in

the case of securities purchased at a discount by adding the product

thus obtained to the purchase price.

e. To assure the continued operation and solvency of the corporation

for the carrying out of its corporate purposes, provision is made in

paragraph a of this subdivision for the accumulation in each capital

reserve fund of an amount equal to the maximum capital reserve fund

requirement. In order further to assure such maintenance of each capital

reserve fund, there shall be paid by the city to the corporation for

deposit in each capital reserve fund on or before the first day of

April, in each year, such amount, if any, needed for the purpose of

restoring each such capital reserve fund to the maximum capital reserve

fund requirement for such fund, as shall be certified by the chairperson

of the corporation to the mayor and the director of management and

budget on or before the first day of December next preceding; provided

that any such amount shall have been first appropriated by or on behalf

of the city for such purpose or shall have been otherwise made available

from the proceeds of notes or bonds of the city authorized and issued

pursuant to the local finance law for such purpose, which is hereby

determined to be a specific object or purpose having a period of

probable usefulness of five years. In the event of the failure or

inability of the city to pay over to the corporation, in full, on or

before such first day of April the amount so certified the chairperson

of the corporation shall forthwith certify to the comptroller of the

state of New York the amount remaining unpaid and thereupon the state

comptroller shall pay to the corporation, out of the first moneys

available for the next succeeding payments of (i) state aid apportioned

to the city of New York as per capita aid for the support of local

government pursuant to section fifty-four of the state finance law or

(ii) such other aid or assistance payable by the state to the city and

not otherwise allocated as shall supersede or supplement such state per

capita aid, including federal moneys apportioned to the city by the

state, such amount remaining unpaid, after giving written notice to the

director of management and budget of each amount to be paid out of such

state aid, until the amount in each such capital reserve fund is

restored to the maximum capital reserve fund requirement thereof;

provided, however, that prior to the issuance of any notes or bonds of

the corporation pursuant to this article the city shall have enacted a

local law authorizing payments from such sources into such a fund so

long as any notes or bonds of the corporation shall be outstanding and

unpaid, and provided further that moneys, if any, payable to the city

university construction fund pursuant to the provisions of the city

university construction fund act shall be paid, in full, to such fund,

prior to any payments therefrom to the corporation. Any amount so paid

over to the corporation shall be deducted from the corresponding

apportionment of such per capita state aid otherwise payable to the city

of New York, and shall not obligate the state to make nor entitle the

city to receive any additional apportionment or payment of per capita

state aid. All amounts paid over to the corporation as provided in this

paragraph, including amounts paid by the state comptroller out of

payments of such state aid, shall constitute and be accounted for as

non-interest bearing loans by the city to the corporation and, subject,

subordinate and junior to the rights of the holders of any notes or

bonds of the corporation theretofore or thereafter issued, shall be

repaid to the city from (i) moneys in such capital reserve fund in

excess of the maximum capital reserve fund requirement thereof or (ii)

any moneys of the corporation not required for any other of its

corporate purposes.

f. In the event the chairperson of the corporation shall certify to

the mayor and director of management and budget or to the state

comptroller any amount necessary to restore a capital reserve fund to

the maximum capital reserve fund requirement thereof pursuant to

subdivision e of this section, the chairperson shall simultaneously

deliver to such persons a statement of the cause or causes of such

capital reserve fund deficiency and the measures to be taken by the

corporation or the department of housing preservation and development to

insure repayment of any loans made by the city to the corporation,

including amounts paid by the state comptroller out of payments of state

aid, for the purpose of restoring such capital reserve fund to the

maximum capital reserve fund requirement thereof and to prevent the

recurrence of any such deficiency.

2. Notwithstanding the provisions of subdivision one hereof, the

corporation may issue bonds for any of its corporate purposes, without

making any deposit in a capital reserve fund and the provisions of

subdivision one of section six hundred fifty-six of this article shall

not apply to such bonds and the principal of and interest on such bonds

shall not be payable from or secured by any capital reserve fund.

3. The corporation shall create and establish such other fund or funds

as may be necessary or desirable for its corporate purposes.

§ 657 — Agreement with the state

Agreement with the state. The state does hereby pledge to and

agree with the holders of any notes or bonds issued under this article

that the state will not limit or alter the rights hereby vested in the

corporation to fulfill the terms of any agreements made with the said

holders thereof, or in any way impair the rights and remedies of such

holders until such notes and bonds, together with the interest thereon,

with interest on any unpaid installments of interest, and all costs and

expenses in connection with any action or proceeding by or on behalf of

such holders, are fully met and discharged. The corporation is

authorized to include this pledge and agreement of the state in any

agreement with the holders of such notes or bonds.

§ 658 — State and city not liable on notes and bonds

State and city not liable on notes and bonds. The notes, bonds

or other obligations of the corporation shall not be a debt of either

the state of New York or of the city of New York, and neither the state

nor the city shall be liable thereon, nor shall they be payable out of

any funds other than those of the corporation; and such notes and bonds

shall contain on the face thereof a statement to such effect.

§ 659 — City's right to require redemption of bonds

City's right to require redemption of bonds. Notwithstanding

and in addition to any provisions for the redemption of bonds which may

be contained in any contract with the holders of the bonds, the city

may, upon furnishing sufficient funds therefor, require the corporation

to redeem, prior to maturity, as a whole, any issue of bonds on any

interest payment date not less than twenty years after the date of the

bonds of such issue at one hundred five per centum of their face value

and accrued interest or at such lower redemption price as may be

provided in the bonds in case of the redemption thereof as a whole on

the redemption date. Notice of such redemption shall be published in at

least two newspapers published and circulating in the city of New York

at least twice, the first publication to be at least thirty days before

the date of redemption.

§ 660 — Remedies of noteholders and bondholders

Remedies of noteholders and bondholders. 1. In the event that

the corporation shall default in the payment of principal of or interest

on any issue of notes or bonds after the same shall become due, whether

at maturity or upon call for redemption, and such default shall continue

for a period of thirty days, or in the event that the corporation shall

fail or refuse to comply with the provisions of this article, or shall

default in any agreement made with the holders of any issue of notes or

bonds, the holders of twenty-five per centum in aggregate principal

amount of the notes or bonds of such issue then outstanding, by

instrument or instruments filed in the office of the clerk of the county

of New York and proved or acknowledged in the same manner as a deed to

be recorded, may appoint a trustee to represent the holders of such

notes or bonds for the purposes herein provided.

2. Such trustee may, and upon written request of the holders of

twenty-five per centum in principal amount of such notes or bonds then

outstanding shall, in such trustee's own name:

(a) by suit, action or proceeding in accordance with the civil

practice law and rules, enforce all rights of the noteholders or

bondholders, including the right to require the corporation to carry out

any agreement with such holders and to perform its duties under this

article;

(b) bring suit upon such notes or bonds;

(c) by action or suit, require the corporation to account as if it

were the trustee of an express trust for the holders of such notes or

bonds;

(d) by action or suit, enjoin any acts or things which may be unlawful

or in violation of the rights of the holders of such notes or bonds;

(e) declare all such notes or bonds due and payable, and if all

defaults shall be made good, then, with the consent of the holders of

twenty-five per centum of the principal amount of such notes or bonds

then outstanding, annul such declaration and its consequences.

3. The supreme court shall have jurisdiction of any suit, action or

proceeding by the trustee on behalf of such noteholders or bondholders.

The venue of any such suit, action or proceeding shall be laid in the

county of New York.

4. Before declaring the principal of notes or bonds due and payable,

the trustee shall first give thirty days' notice in writing to the

corporation.

§ 661 — Assistance to the corporation

Assistance to the corporation. The state or city may make

grants of money or property to the corporation for the purpose of

enabling it to carry out its corporate purposes and for the exercise of

its powers, including, but not limited to, deposits to the reserve

funds. This section shall not be construed to limit any other power the

state or city may have to make such grants to the corporation.

§ 662 — Notes and bonds as legal investments

Notes and bonds as legal investments. The notes and bonds of

the corporation are hereby made securities in which all public officers

and bodies of this state and all municipalities and municipal

subdivisions, all insurance companies and associations and other persons

carrying on an insurance business, all banks, bankers, trust companies,

savings banks and savings associations, including savings and loan

associations, building and loan associations, investment companies and

other persons carrying on a banking business, all administrators,

guardians, executors, trustees and other fiduciaries, and all other

persons whatsoever who are now or may hereafter be authorized to invest

in bonds or in other obligations of the state, may properly and legally

invest funds, including capital, in their control or belonging to them.

The notes and bonds are also hereby made securities which may be

deposited with and may be received by all public officers and bodies of

the state and all municipalities and public corporations for any purpose

for which the deposit of bonds or other obligations of the state is now

or may hereafter be authorized.

§ 663 — Exemption from taxation

Exemption from taxation. 1. The property of the corporation and

its income and operations shall be exempt from taxation.

2. It is hereby determined that the creation of the corporation is in

all respects for the benefit of the people of the state and for the

improvement of their health, safety, welfare, comfort and security, and

that said purposes are public purposes and that the corporation will be

performing an essential governmental function in the exercise of the

powers conferred upon it by this article. The state covenants with the

purchasers and all subsequent holders and transferees of notes and bonds

issued by the corporation, in consideration of the acceptance of and

payment for the notes and bonds, that the notes and bonds of the

corporation issued pursuant to this article and the income therefrom and

all its fees, charges, gifts, grants, revenues, receipts, and other

moneys received or to be received, pledged to pay or secure the payment

of such notes or bonds shall at all times be free from taxation, except

for estate and gift taxes and taxes on transfers. The corporation is

authorized to include this covenant of the state in any agreement with

the holders of such notes or bonds.

§ 664 — Employees of the corporation

Employees of the corporation. 1. Notwithstanding any

inconsistent provisions of this act, the appointment and promotion of

all employees of and for the corporation shall be made in accordance

with the provisions of the civil service law and the rules of the city

civil service commission and the compensation for such employees shall

be fixed by the corporation.

2. The city and the corporation shall have the power to provide for

the transfer to the corporation of agents, employees and facilities of

the city to enable the corporation to fulfill its corporate purposes.

Employees of the city to be transferred to the corporation pursuant to

this article shall be eligible for such use in offices and positions of

the corporation without further examination, and all such employees who

have been appointed to positions in city service in accordance with the

provisions of the civil service law under the rules of the city civil

service commission shall have the same status with respect thereto in

the service of the corporation as they had in city service. Employees

who are members or beneficiaries of any existing pension or retirement

system shall continue to have such rights, privileges, obligations or

status with respect to such system or systems as are prescribed by law

on the date this article takes effect, and all such employees who have

been appointed to positions in city service in accordance with the

provisions of the civil service law under the rules of the city civil

service commission shall have the same status with respect thereto in

the service of the corporation as they had in city service.

3. The predecessor corporation, as defined in subdivision one of

section six hundred fifty-four-d of this article and the corporation

shall have the power to provide for the transfer to the corporation of

agents, employees and facilities of the predecessor corporation to

enable the corporation to assist the subsidiary corporation in

fulfilling its corporate purposes. Employees of the predecessor

corporation to be transferred to the corporation pursuant to this

article shall be eligible for such use in offices and positions of the

corporation without further examination, and all such employees who have

been appointed to positions in predecessor corporation service in

accordance with the provisions of the civil service law under the rules

of the city civil service commission shall have the same status with

respect thereto in the service of the corporation as they had in

predecessor corporation service. Employees who are members or

beneficiaries of any existing pension or retirement system shall

continue to have such rights, privileges, obligations or status with

respect to such system or systems as are prescribed by law on the date

this subdivision takes effect, and all such employees who have been

appointed to positions in predecessor corporation service in accordance

with the provisions of the civil service law under the rules of the city

civil service commission shall have the same status with respect thereto

in the service of the corporation as they had in predecessor corporation

service.

§ 665 — Assistance by department of housing preservation and development

Assistance by department of housing preservation and

development. The commissioner of housing preservation and development

and the department of housing preservation and development are hereby

designated to act for and in behalf of the corporation in servicing

mortgage loans of the corporation, and shall perform such functions and

services in connection with the making, servicing and collection of such

loans as shall be requested by the corporation. The corporation shall

pay to the department of housing preservation and development from any

moneys of the corporation available for such purposes such amounts as

are necessary to reimburse the department of housing preservation and

development for the reasonable cost of the services performed by the

commissioner of housing preservation and development and by the

department of housing preservation and development pursuant to this

section.

§ 666 — Moneys of the corporation

Moneys of the corporation. 1. All moneys of the corporation,

except as otherwise authorized or provided in this article, shall be

deposited as soon as practicable in a separate account or accounts in

banks or trust companies organized under the laws of the state or

national banking association doing business in the city. The moneys in

such accounts shall be paid out on checks signed by such officer or

employee of the corporation as the corporation shall authorize. All

deposits of such moneys shall, if required by the corporation, be

secured by obligations of the United States or of the state or of the

city of a market value equal at all times to the amount of the deposit

and all banks and trust companies are authorized to give such security

for such deposits.

Notwithstanding the provisions of this section, the corporation shall

have power to contract with the holders of any of its notes or bonds as

to the custody, collection, securing, investment and payment of any

moneys of the corporation and of any moneys held in trust or otherwise

for the payment of notes or bonds, and to carry out such contract.

Moneys held in trust or otherwise for the payment of notes or bonds or

in any way to secure notes or bonds and deposits of such moneys may be

secured in the same manner as moneys of the corporation, and all banks

and trust companies are authorized to give such security for such

deposits.

2. Subject to the provisions of any contract with noteholders and

bondholders and the approval of the comptroller, the corporation shall

prescribe a system of accounts.

3. The comptroller, or his legally authorized representative, is

hereby authorized and empowered from time to time to examine the books

and accounts of the corporation including its receipts, disbursements,

contracts, reserve funds, sinking funds, investments, and any other

matters relating to its financial standing. Such an examination shall be

conducted by the comptroller at least once in every five years; the

comptroller is authorized, however, to accept from the corporation, in

lieu of such an examination, an external examination of its books and

accounts made at the request of the corporation.

4. The corporation shall submit to the mayor and the comptroller

within thirty days of the receipt thereof by the corporation a copy of

the report of every external examination of the books and accounts of

the corporation other than copies of the reports of such examinations

made by the comptroller.

§ 667 — Actions

Actions. 1. Except in an action for wrongful death, in any case

founded upon tort a notice of claim shall be required as a condition

precedent to the commencement of an action or special proceeding against

the corporation, any of its subsidiary corporations, or any officer,

appointee or employee thereof, and the provisions of section fifty-e of

the general municipal law shall govern the giving of such notice. An

action for wrongful death shall be commenced in accordance with the

notice of claim and time limitation provisions of title eleven of

article nine of the public authorities law. Any other action against the

corporation, any of its subsidiary corporations, or any other officer,

appointee or employee thereof for damages for injuries to real or

personal property, or for the destruction thereof, or for personal

injuries, alleged to have been sustained, shall not be commenced more

than one year and ninety days after the cause of action therefor shall

have accrued.

2. Except as may otherwise be expressly provided by the corporation,

the corporation shall not be liable for any debts, liabilities,

obligations, agreements, contracts or covenants of any of its subsidiary

corporations. No action or special proceeding of any kind may be brought

against the corporation by any person having claims against or contracts

with any of its subsidiary corporations (including any predecessor

corporation of any of its subsidiary corporations) if the corporation

was not a party to the matter giving rise to such claims or contracts.

§ 668 — Annual report

Annual report. The corporation shall submit to the mayor, the

comptroller and the director of management and budget within ninety days

after the end of its fiscal year, a complete and detailed report setting

forth: (1) its operations and accomplishments; (2) its receipts and

expenditures during such fiscal year in accordance with the categories

or classifications established by the corporation for its operating and

capital outlay purposes, including a listing of all private consultants

engaged by the corporation on a contract basis and a statement of the

total amount paid to each such private consultant; (3) its assets and

liabilities at the end of its fiscal year, including a schedule of its

mortgage loans and commitments and the status of reserve, special or

other funds; and (4) a schedule of its notes and bonds outstanding at

the end of its fiscal year, together with a statement of the amounts

redeemed and incurred during such fiscal year.

§ 669 — Article not affected if in part unconstitutional

Article not affected if in part unconstitutional. If any

section, subdivision, paragraph, sentence, clause or provision of this

article shall be unconstitutional or ineffective, in whole or in part,

to the extent that it is not unconstitutional or ineffective it shall be

valid and effective and no other section, subdivision, paragraph,

sentence, clause or provision shall on account thereof be deemed invalid

or ineffective.

§ 670 — Inconsistent provisions in other laws superseded

Inconsistent provisions in other laws superseded. Insofar as

the provisions of this article are inconsistent with the provisions of

any other law, general, special or local, the provisions of this article

shall be controlling.

ARTICLE 15 Participation Loans to Owners of Multiple Dwellings By Private Investors and Municipalities Utilizing Federal Grant Funds

§ 800 — Policy and purposes of article

Policy and purposes of article. It is hereby declared and found

that there exists in municipalities in this state substandard and

insanitary areas and neighborhoods characterized by undermaintained and

deteriorating housing accommodations and under-utilized non-residential

buildings and under-utilized vacant land. It is further found that there

exists in such municipalities a diminishing and seriously inadequate

supply of safe and sanitary dwelling accommodations, particularly for

persons of low income; that the loss of housing accommodations is caused

by the inability of the ordinary unaided operations of private

enterprise to make loans for rehabilitation or construction purposes or

for conversion which accelerates the process of deterioration and

abandonment, turning active and viable neighborhoods into slums and

blighted areas; and that the prevention of deterioration and loss

through abandonment can only be achieved by the elimination of

conditions which are unsafe or detrimental to health, the replacement of

antiquated heating, plumbing, and electrical systems and, where

necessary, the overall rehabilitation of certain housing accommodations,

the construction of new housing accommodations on vacant land and the

conversion of under-utilized non-residential property to residential

use, and that the unavailability of funds for the conversion of

under-utilized property to residential use, for the preservation and

rehabilitation of housing accommodations and for the construction of new

housing accommodations on vacant land constitutes a threat to the

health, safety and well-being of the persons who occupy them and denies

to others the possibility of living in safe and sanitary housing

accommodations.

In order to promote the preservation and rehabilitation of such

housing accommodations, the creation of new housing accommodations by

the conversion of under-utilized non-residential property into multiple

dwellings and the construction of new housing accommodations on vacant

land in such areas and to encourage the investment of private capital in

such areas, provision should be made for a municipality to attract

private investment for such purposes by utilizing funds, which are

available from the federal government through specific or discretionary

grants, or are available from other financing sources, for joint

participation loans with private investors, or loans or grants by the

municipality, to effect the required construction, rehabilitation or

conversion.

The necessity in the public interest for the provisions hereinafter

enacted is hereby declared as a matter of legislative determination.

§ 801 — Definitions

Definitions. As used in this article the following terms shall

have the following meanings unless a different meaning clearly appears

from the context:

1. "Agency" shall mean the office or agency of a municipality

authorized to administer the expenditure of grants from the United

States of America to assist community development activities and

programs for the construction, rehabilitation or conservation of

multiple dwellings and housing accommodations or for the conversion of

under-utilized non-residential property into multiple dwellings or, in

the absence of such an office or agency, the comptroller or chief fiscal

officer of such municipality; except that in the city of New York it

shall be the department of housing preservation and development or any

successor thereto and shall include, except for purposes of section

eight hundred four of this article, the New York city housing

development corporation with respect to any participation in a loan by

such corporation pursuant to section eight hundred five of this article.

1-a. "Construction" shall mean the construction of new multiple

dwellings upon vacant land.

2. "Conversion" shall mean the conversion of under-utilized

non-residential property into a multiple dwelling.

3. "Federal grant funds" shall mean any grants received from the

United States of America for community development activities or for the

construction, rehabilitation or conservation of multiple dwellings or

for the conversion of under-utilized non-residential property into

multiple dwellings.

4. "Non-residential property" shall mean any property which is not a

multiple dwelling, and which is intended to be converted into a multiple

dwelling, and which is under-utilized for commercial, industrial or

other non-residential purposes.

5. "Owner" shall mean an individual, partnership, corporation or other

entity, including a non-profit company, a mutual company, or a housing

development fund company, which holds record or beneficial title in fee

simple to the existing multiple dwelling to be rehabilitated or the

non-residential property to be converted into a multiple dwelling and

the real property upon which it is situate or to vacant land upon which

the new multiple dwelling is to be constructed, or is the lessee of any

such real property having an unexpired term of at least thirty years.

5-a. "Participation loan" and the municipality's "participation" in,

"portion" of, or "investment" in a loan, or words of similar meaning,

shall mean any loan or grant made by the municipality or the New York

city housing development corporation pursuant to this article either

with or without a private investor, provided, however, that provisions

of this article concerning the repayment or forgiveness of, or security

for, a loan shall not apply to any grant made pursuant to this article.

6. "Private investor" shall mean one or more banking organizations,

foundations, labor unions, credit unions, employers' associations,

veterans' organizations, colleges, universities, educational

institutions, child care institutions, hospitals, medical research

institutes, insurance companies, trustees or fiduciaries, trustees of

pension and retirement funds and systems, corporations, partnerships,

individuals or other entities or any combination of the foregoing, and

shall include the United States of America and the state of New York and

any agency, office or public benefit corporation thereof. As used in

this subdivision, the terms "trustees" and "fiduciaries" shall include

any fiduciary or fiduciaries holding funds for investment, and the term

"banking organizations" shall have the same meaning as in subdivision

eleven of section two of the banking law.

7. "Rehabilitation" shall mean the installation, replacement or repair

of heating, plumbing, electrical and related systems, or elimination of

conditions dangerous to human life or detrimental to health, including

nuisances as defined in section three hundred nine of the multiple

dwelling law, or other rehabilitation or improvement of existing

multiple dwellings.

8. "Value" shall mean the "as is" value of the existing multiple

dwelling, or in the case of non-residential property to be converted

into a multiple dwelling, the "as is" value of such non-residential

property, and the land upon which it is situate prior to rehabilitation

or conversion or, in the case of the construction of a new multiple

dwelling, the "as is" value of the vacant land prior to such

construction plus the total of all costs of such rehabilitation,

conversion or construction, including, but not limited to, the costs of

any or all undertakings necessary for the planning, financing, tenant

relocation, acquisition, satisfaction of tax liens and other municipal

liens and encumbrances, construction, equipment and development in

connection therewith.

9. "State grant funds" shall mean any grants received from the state

or any public benefit corporation for community development activities

for the construction, rehabilitation or conservation of multiple

dwellings.

§ 801-a — Application to certain garden-type maisonette dwelling projects

Application to certain garden-type maisonette dwelling

projects. For purposes of this article an existing multiple dwelling

shall be deemed to include any garden-type maisonette dwelling project

consisting of a series of dwelling units which together and in their

aggregate were arranged or designed to provide three or more apartments

and are provided as a group collectively with all essential services

such as, but not limited to, water supply, house sewers and heat, and

which are in existence and operated as a unit under single ownership on

the date upon which an application for a loan pursuant to this article

is received by the municipality, notwithstanding that certificates of

occupancy were issued for portions thereof as private dwellings.

§ 802 — Participation loans to owners

Participation loans to owners. 1. (a) Notwithstanding the

provisions of any general, special or local law, one or more private

investors and a municipality, acting through its agency, shall have the

power to participate and invest in making loans to the owners of

existing multiple dwellings or to the owners of non-residential property

or to the owners of vacant land subject to the limitations of

subdivisions two through seven of this section, in such amounts as shall

be required for (i) the rehabilitation of such existing multiple

dwellings or for the conversion of such non-residential property or for

the construction of new multiple dwellings on such vacant land, provided

that such rehabilitation, conversion or construction may include climate

resiliency improvements, and if any such owner acquires the existing

multiple dwelling or the non-residential property or the vacant land for

the purpose of such rehabilitation, conversion or construction or owns

the existing multiple dwelling or the non-residential property or the

vacant land subject to an outstanding indebtedness, such loans may be

made exclusively for or may include such amounts as may be required for

the cost of such acquisition or for the refinancing of such outstanding

indebtedness, (ii) providing site improvements located on the property

on which such existing multiple dwellings are located or on such

non-residential property or vacant land or in a public right-of-way,

incidental or appurtenant to such rehabilitation, conversion or

construction, including, but not limited to, water and sewer facilities,

sidewalks, landscaping, parks and open space, social, recreational,

communal and other non-residential facilities and the outfitting

thereof, the curing of problems caused by abnormal site conditions,

excavation and construction of footings and foundations and other

improvements associated with the provision of infrastructure for housing

accommodations, or (iii) providing for other costs of developing housing

accommodations, and such private investors and a municipality may

jointly participate or invest in the making of temporary loans or

advances to such owners in anticipation of the permanent participation

loans for such purposes.

(b) Notwithstanding the provisions of any general, special or local

law, and in addition to the power to make or contract to make

participation loans granted by paragraph (a) of this subdivision, the

municipality, acting through its agency, and the New York city housing

development corporation shall each have the power to make or contract to

make loans or grants to any owner described in paragraph (a) of this

subdivision without the participation of a private investor, on the same

terms as permitted under such paragraph for a participation loan.

2. A municipality may utilize federal grant funds or state grant funds

or any municipal funds to finance its participation or investment in a

loan pursuant to this article. This subdivision shall not apply to any

participation in a loan by the New York city housing development

corporation pursuant to section eight hundred five of this article.

3. Each participation loan shall be secured by a bond or note and

single participating mortgage or by separate bonds or notes and

mortgages upon the existing multiple dwelling or the non-residential

property and the land upon which it is situated or, in the case of the

construction of a new multiple dwelling, upon the vacant land and the

multiple dwelling to be constructed, or, in the case of a multiple

dwelling held in the condominium form of ownership, a note and mortgage

upon the condominium units rehabilitated with such participation loan,

provided that a participation loan to an owner who is a lessee shall be

secured by a leasehold interest in such property, and provided, further,

that each such loan shall be made upon such terms and conditions as may

be approved by the agency, including but not limited to, provisions that

(a) priority may be given to the payment of the principal of and

interest on that portion of the mortgage indebtedness attributable to

participation in the loan by one or more private investors, (b) the

interest of the municipality created as a result of making such a

mortgage loan may be subordinated to the interest that one or more of

such private investors may have upon such participation, (c) the

interest of each upon such participation need not be of equal priority

as to lien nor be equal as to interest rate, time or rate of

amortization of principal or time of payment of interest, or otherwise,

(d) the bond or note and mortgage may provide that the municipality's

portion of a participation loan made to an owner shall be reduced to

zero commencing in the fifteenth year after the execution of the bond or

note and mortgage, provided that, as of the date of any such reduction,

such multiple dwelling has been and continues to be owned and operated

in a manner consistent with a regulatory agreement with the

municipality. Notwithstanding such provision as contained in the bond or

note and mortgage, the municipality's portion of the loan shall be

reduced to zero only if, prior to or simultaneously with delivery of

such bond or note and mortgage, the agency made a written determination

that such reduction would be necessary to ensure the continued

affordability or economic viability of the multiple dwelling. Such

written determination shall document the basis upon which the loan was

determined to be eligible for evaporation.

4. Each such bond or note and mortgage or bonds or notes and mortgages

shall be repaid over or within a period of forty years, provided that

such period may be extended as the agency may determine necessary to

ensure the continued affordability or economic viability of the multiple

dwelling, in such manner as may be provided in such bond or note and

mortgage or bonds or notes and mortgages. Such bond or note and mortgage

or bonds or notes and mortgages and any contract in connection with such

permanent and temporary loans may contain such other terms and

provisions not inconsistent with the provisions of this article as the

local legislative body or the agency may deem necessary or desirable to

secure repayment of the loan, the interest thereon and other charges in

connection therewith and to carry out the purposes and provisions of

this article.

5. The bond or note or the bonds or notes issued by the owner and the

mortgage or mortgages relating thereto may authorize such owner, with

the consent of the agency and the private investor, to prepay the

principal of the loan subject to such terms and conditions as therein

provided. Such bond or note and mortgage or bonds or notes and mortgages

may contain such other clauses and provisions as the agency shall

require.

6. Where a municipality joins with one or more private investors in

making a participation loan secured by a single participating mortgage

or by separate mortgages, the agency may make provision, either in the

mortgage or mortgages or by separate agreement, for the performances of

such services as are generally performed by a banking institution or

insurance company which itself owns and holds a mortgage or by a trustee

under a trust mortgage and for the imposition of reasonable fees for

financing, regulation, supervision and audit of such multiple dwelling.

The agency is hereby authorized to act as trustee or to consent to the

appointment of a banking institution or any subsidiary thereof to act in

such capacity and to provide such services as are generally performed by

any such bank itself or its subsidiary owning and holding such a

mortgage.

7. Banking organizations and insurance companies may exercise such

power only to the extent and on such conditions as may be authorized by

the state superintendent of financial services.

8. Notwithstanding the provisions of any other law, a savings bank may

invest to an amount not exceeding ninety per centum of the value of any

real property when jointly participating or investing in a loan pursuant

to the provisions of this article or not exceeding ninety-five per

centum of the value of any real property when jointly participating or

investing in a loan pursuant to the provisions of article fourteen of

this chapter.

§ 803 — Conditions precedent to making such loans

Conditions precedent to making such loans. A municipality shall

not participate in a loan pursuant to this article unless the agency

finds that the area in which the existing multiple dwelling,

non-residential property or vacant land is situated is a blighted,

deteriorated or deteriorating area, or has a blighting influence on the

surrounding area, or is in danger of becoming a slum or a blighted area

because of the existence of substandard, insanitary, deteriorating or

deteriorated conditions, an aged housing stock, or under-utilized

non-residential property, or other factors indicating an inability of

the private sector unaided to cause such rehabilitation, conversion or

construction to be made and unless the agency has notified occupants of

the existing multiple dwelling of the contemplated rehabilitation and

has advised them of the expected rental increase to result therefrom and

a representative of the agency has met or has offered to meet at least

once with the occupants.

§ 804 — Rentals

Rentals. Notwithstanding the provisions of, or any regulation

promulgated pursuant to, the emergency housing rent control law, the

local emergency housing rent control act or local law enacted pursuant

thereto, upon completion of the rehabilitation of an existing multiple

dwelling, the construction of a new multiple dwelling or the conversion

of non-residential property into a multiple dwelling aided by a

participation loan made pursuant to this article, the agency shall

establish the initial rent for each dwelling unit within the

rehabilitated, newly constructed or converted multiple dwelling. Where

the city of New York or the New York city housing development

corporation has participated or invested in a loan pursuant to this

article, all dwelling units within the multiple dwelling subsequent to

the establishment of initial rents by the agency shall be subject to the

rent stabilization law of nineteen hundred sixty-nine provided, that the

occupant in possession of a dwelling unit when the multiple dwelling is

made subject to the rent stabilization law of nineteen hundred

sixty-nine shall be offered a two year lease notwithstanding any

contrary provisions of, or regulations adopted pursuant to, the rent

stabilization law of nineteen hundred sixty-nine at such initial rent

set for such dwelling unit by the agency.

§ 805 — Participation of New York city housing development corporation

Participation of New York city housing development corporation.

The New York city housing development corporation may participate with

one or more private investors or with the city of New York or with both

in making a loan pursuant to the provisions of this article. Where such

corporation participates in making such a loan, the term municipality as

used in this article shall include such corporation with respect to such

participation.

§ 806 — Regulations

Regulations. The agency may promulgate supplementary rules and

regulations to carry out the provisions of this article.

ARTICLE 16 Neighborhood Preservation Companies

§ 901 — Declaration of legislative findings

Declaration of legislative findings. The legislature hereby

finds and declares that there has developed in recent years, in various

municipalities of the state, a growth of community-based not-for-profit

organizations, originating for the most part within and organized by

residents of neighborhoods which are characterized by a predominance of

residents of low income and a residential housing stock which is largely

old, deteriorating and substandard.

The legislature further finds that the involvement of the residents of

various municipalities of the state in neighborhood preservation

activities in their respective neighborhoods, through the media of

locally-based, not-for-profit organizations responsive to the needs of

the residents, is in the public interest and may be expected to produce

increased renovation and rehabilitation of existing but deteriorating

housing accommodations, improvement in housing code enforcement and the

correction, removal and repair of substandard housing and housing

conditions dangerous to life, safety or health. Such involvement in

neighborhood preservation activities may also be expected to produce

reduced abandonment of housing, which the legislature finds to be

increasing in many neighborhoods of the state and to be continuing to

cause shortages of housing accommodations for persons and families of

low income and the relocation of such families from neighborhoods to

which they have developed strong emotional as well as economic

attachments.

The legislature further finds that many municipalities throughout the

state are now receiving or will receive monies under federal programs,

that such funds may be used and applied by such municipalities for the

neighborhood preservation activities referred to in this article and

that an efficient and effective use of such funds and the public

interest will be promoted by the active involvement of various

not-for-profit organizations.

The legislature further finds that numerous not-for-profit

organizations which have arisen throughout the state are heavily

dependent upon voluntary services of neighborhood residents; that such

organizations are dependent in part for operating funds upon fees

generated by the management of housing accommodations; that such

organizations are dependent for the remainder of their operating funds,

to a significant extent, upon gifts and grants from private individuals,

corporations and foundations; that such financial assistance is

inherently uncertain and covers expenses only over short periods of

time, thereby causing such organizations to be inadequately financed,

unable to plan any long range housing activities and unable to attract,

employ or contract with needed experts and technicians for assistance to

implementing neighborhood preservation programs; and that it is a proper

and necessary public purpose and activity of the state to assure the

adequate funding of not-for-profit organizations which are active in

neighborhood preservation activities.

The necessity in the public interest for the provisions hereinafter

enacted is hereby declared as a matter of legislative determination.

§ 902 — Definitions

Definitions. As used in this article, the following words and

phrases shall have the following meanings:

1. "Commissioner" shall mean the commissioner of the state division of

housing and community renewal.

2. "Division" shall mean the state division of housing and community

renewal.

3. "Municipality" shall mean any city, town or village within the

state.

4. "Neighborhood preservation company" shall mean a corporation

organized under the provisions of the not-for-profit corporation law

which has been engaged primarily in one or more of the neighborhood

preservation activities specified in subdivision five of this section.

5. "Neighborhood preservation activities" shall mean activities

engaged in by a neighborhood preservation company within a

geographically defined neighborhood of a municipality, provided,

however, that the division may fund a neighborhood preservation company

to engage in such activities in unserved and underserved areas of the

municipality lying outside of its initially designated neighborhood

area, that are designed (a) to construct, maintain, preserve, repair,

renovate, upgrade, improve, modernize, rehabilitate or otherwise prolong

the useful life and to manage and coordinate the rehabilitation of

residential dwelling accommodations within such neighborhood, to restore

abandoned and vacant as well as occupied housing accommodations to

habitable condition; to demolish structurally unsound or unsafe or

otherwise unsightly or unhealthy structures which no longer serve or can

economically be made to serve a useful purpose consistent with

stabilizing or improving a neighborhood; to seal and maintain vacant but

structurally sound structures which are capable of being rehabilitated

at a future time and used for housing purposes; to acquire, where

appropriate, buildings which contain housing accommodations; to

facilitate the disposition of buildings containing housing

accommodations to individual occupants thereof or to cooperative groups

whose members shall be occupants thereof; to assist owners, occupants

and tenants of housing accommodations to obtain improvements in the

physical conditions thereof and in the maintenance and management

thereof; to administer landlord training classes; and to manage housing

accommodations as agents for the owners thereof or administrators or

receivers appointed or designated pursuant to any law of the state; and

(b) to accomplish similar purposes and meet similar needs with respect

to retail and service establishments within such neighborhoods when

carried out in connection with and incidental to a program of housing

related activities.

6. "Persons of low income" shall mean individuals and families whose

annual incomes do not exceed ninety per cent of the median annual income

for all residents of the municipality within which they reside.

7. "Merged company" shall mean a neighborhood preservation company

maintaining a contract pursuant to section nine hundred three of this

article that has undergone a merger with one or more other neighborhood

preservation companies, which is also maintaining a contract pursuant to

section nine hundred three of this article, that has led the merged

companies to reduce the number of contracts being maintained with the

division pursuant to section nine hundred three of this article to a

total of one.

8. "Unmerged company" shall mean a neighborhood preservation company

that is not a merged company.

§ 903 — Contracts with neighborhood preservation companies

Contracts with neighborhood preservation companies. 1. The

commissioner may enter into contracts with neighborhood preservation

companies for the performance of neighborhood preservation activities.

Such contracts shall be entered into, however, only after appropriate

findings by the commissioner and shall be subject to the limitations

hereinafter set forth.

2. Prior to entering into a contract with a neighborhood preservation

company, the commissioner shall have made a finding that the

neighborhood in which the activities are proposed to be conducted

contains a significant amount of deteriorating or substandard housing

which is not being adequately repaired, renovated, upgraded, modernized

or rehabilitated under existing programs so as to provide sound housing

at costs which the residents of such neighborhoods can afford; that the

neighborhood preservation company which proposes to contract with the

commissioner is a bona fide organization which shall have been in

existence either as a corporation or as an unincorporated, organized

group and performing significant neighborhood preservation activities

for at least one full year prior to entering into any contract with the

commissioner and which shall have demonstrated by its immediate past and

current activities that it has the ability to preserve, repair,

maintain, renovate, rehabilitate, manage or operate housing

accommodations or to engage in other neighborhood preservation

activities in such neighborhood; that the neighborhood preservation

activities which are to be performed pursuant to the proposed contract

are needed by the neighborhood; and that the neighborhood preservation

company possesses or will acquire or gain access to the requisite staff,

office facilities within such neighborhood, equipment and expertise to

enable it to perform the activities which it proposes to undertake

pursuant to such contract; provided, however, that merged companies'

office facilities may be located outside such neighborhood if they are

located in a municipality wholly contained within the merged companies'

neighborhood, and provided further, however, that it shall not be a bar

to the commissioner's contracting with a neighborhood preservation

company that one or more organizations, whether pursuant to contract

with the commissioner or not, are conducting neighborhood preservation

activities wholly or partially within the same neighborhood.

3. In determining to enter into a contract with a neighborhood

preservation company pursuant to this article, the commissioner shall

investigate, to the extent which he shall deem necessary or appropriate,

and determine;

(a) that the geographic boundaries proposed by the applicant for such

a contract define a recognized or established neighborhood or area

within the municipality;

(b) that the demographic and other relevant data pertaining to such

neighborhood indicate that the neighborhood has sustained physical

deterioration, decay, neglect or disinvestment, that a substantial

proportion of the residential population that the neighborhood

preservation company proposes to assist through its activities is of low

income and that such neighborhood is in need of active intervention to

effect its preservation, stabilization or improvement;

(c) that the activities proposed to be conducted by the neighborhood

preservation company are reasonably calculated to have a positive effect

on the preservation, stabilization or improvement of the neighborhood;

(d) that the neighborhood preservation company's officers, directors

and members are fairly representative of the residents and other

legitimate interests of the neighborhood, that they will carry out such

a contract in a responsible manner and that at least thirty-three

percent of the directors of the neighborhood preservation company are

residents of the neighborhood;

(f) that the fees received or proposed to be received by the

neighborhood preservation company from the management of housing

accommodations are fair and reasonable;

(g) that the plan submitted by the neighborhood preservation company

demonstrates that such company will, to the extent possible, give

priority when hiring new employees to residents of the neighborhood who

are either unemployed or not fully employed;

(h) that the neighborhood preservation company has a plan to

facilitate, to the maximum extent feasible, the disposition of any

buildings containing housing accommodations owned by the company to

individual occupants thereof or to cooperative groups whose members

shall be occupants thereof; and

(i) that the interests of occupants of any buildings containing

housing accommodations owned by the neighborhood preservation company

are adequately represented.

4. Contracts entered into hereunder with neighborhood preservation

companies shall be limited in duration to periods of one year, but may

thereafter be renewed, extended or succeeded by new contracts from year

to year in the discretion of the commissioner; they shall define with

particularity the neighborhood or portion thereof within which the

neighborhood preservation activities shall be performed; they shall

specify the nature of the neighborhood preservation activities which

shall be performed including the approximate number of buildings,

residential dwelling units and local retail and service establishments

which shall be affected; they shall locate and describe, with as much

particularity as is reasonably possible, the buildings with respect to

which such activities shall be performed during the contract term; and

they shall specify the number of persons, salaries or rates of

compensation and a description of duties of those who shall be engaged

by the neighborhood preservation company to perform the activities

embraced by the contract together with a schedule of other anticipated

expenses.

5. Prior to renewing or extending a contract or entering a succeeding

contract with a neighborhood preservation company the division shall

determine that:

(a) the company shall have substantially completed the neighborhood

preservation activities specified in the contract to be renewed,

extended, or succeeded;

(b) the company shall have received the sums, services, and funds

specified in subdivision four of section nine hundred four of this

article; and

(c) the activities carried out by the company pursuant to its contract

shall have had a significant impact on the community's needs as

specified in the contract.

6. Prior to terminating, not renewing or not extending a contract the

division shall:

(a) determine that the company is in violation of the terms and

conditions of the contract or that funds provided pursuant to the

contract are being expended in a manner not consistent with the terms of

the contract or the provisions of this article; or

(b) determine that necessary and appropriate technical assistance has

been provided without significant improvement in the activities of the

company; and

(c) provide the company with written notice, at least forty-five days

in advance, of its intent to terminate, not renew or not extend the

contract and provide the company with an opportunity to appear and be

heard before the division with respect to the reasons for such proposed

termination, non-renewal or non-extension. At the same time that a

company is notified of the division's intent to terminate, not renew or

not extend the contract, the division shall likewise inform the senate

and assembly members who represent areas within such company's

geographic boundaries.

7. The division shall establish, for renewal of contracts, a procedure

which provides the company with at least forty-five days notice of the

company's obligations and rights in that process, informs the company of

the amount of the renewal contract, and facilitates the timely execution

of the contract and disbursement of funds.

8. The division may temporarily withhold payments and may elect not to

renew or extend a contract or enter a succeeding contract with any

neighborhood preservation company if the company is not in compliance

with its contract, has without good cause failed to submit documentation

required under its contract or requested by the division to make the

determinations required under subdivision five of this section or has

not satisfied any other conditions consistent with this article for

renewing or extending a contract or entering a succeeding contract.

§ 904 — Payments to neighborhood preservation companies for neighborhood preservation activities

Payments to neighborhood preservation companies for

neighborhood preservation activities. 1. Each contract entered into with

a neighborhood preservation company shall provide for payment to the

neighborhood preservation company for neighborhood preservation

activities to be performed by it.

2. Payment to neighborhood preservation companies pursuant to this

article shall be restricted to sums required for the payment of salaries

and wages to employees of such companies who are engaged in rendering

neighborhood preservation activities, fees to consultants and

professionals retained by them for planning and performing such

activities and other costs and expenses directly related to such

employees, consultants and professionals.

3. In no event shall any contract or payment be made, nor shall any

payments be used, to defray the costs of the construction, repair,

renovation, rehabilitation, operation, demolition, clearance or sealing

of any building or other structure, except that such funds may be used

for planning any such activity and for renovating, repairing,

furnishing, equipping and operating an office facility to be used in

connection with the conduct of neighborhood preservation activities by

the neighborhood preservation company. Payments shall be made by the

division to the neighborhood preservation company, not less frequently

than semi-annually, at or prior to the commencement of each such time

period, to compensate such company for the neighborhood preservation

activities which it shall undertake to perform provided, that with

respect to contracts entered into on or after June thirtieth, nineteen

hundred ninety-seven the first such payment shall be made by the

division beginning on or after July first of the fiscal year for which

an appropriation in support of such payment was made and provided

further that the final such payment to the neighborhood preservation

company shall be made no later than March thirty-first of such fiscal

year, unless such payment has been withheld pursuant to subdivision

eight of section nine hundred three of this article.

4. In negotiating each contract, the division shall consider and take

into account any and all other sums available or anticipated to be made

available to the neighborhood preservation company from any and all

sources which may be used to defray the costs of the neighborhood

preservation activities set forth in the contract, including, without

limitation, fees generated by the management of housing accommodations,

contributions from private foundations, corporations, firms and

individuals and funds received under grants and contracts pursuant to

any program or programs operated or administered by any governmental

agency or instrumentality and shall make a determination that the sums

available or anticipated to be made available for the neighborhood

preservation company from such other sources, together with the value of

services to be rendered for the benefit of the neighborhood preservation

company for which payment is not required to be made by such company,

amount to at least thirty-three and one-third percent of the amount of

such contract.

5. When disbursing funds for contracts with neighborhood preservation

companies, pursuant to section nine hundred three of this article, the

division shall use the following criteria, formulas and tables to

determine the distribution of funds:

(a)(i) The total unmerged company funding shall equal the current

number of unmerged company contracts multiplied by the per group award.

(ii) The unmerged company funding shall equal the per group award.

(iii) The merged company funding shall equal the funding modification

multiplied by the per group award.

(b) Merged company funding shall be determined on an individual basis

for each neighborhood preservation company. The following tables show

the funding modification to be used:

(i) In the case of two companies merging, the following table shall be

used:

Years since Funding

merger modification

1 200%

2 190%

3 180%

4 170%

5 160%

6 150%

(ii) In the case of three companies merging, the following table shall

be used:

Years since Funding

merger modification

1 300%

2 290%

3 280%

4 270%

5 260%

6 250%

7 240%

8 230%

9 220%

10 210%

11 200%

(iii) In the case of four or more companies merging, the following

table shall be used:

Years since Funding

merger modification

1 400%

2 390%

3 380%

4 370%

5 360%

6 350%

7 340%

8 330%

9 320%

10 310%

11 300%

12 290%

13 280%

14 270%

15 260%

16 250%

(c) If a neighborhood preservation company that has undergone a merger

continues to renew their contract beyond the timeframes listed in the

above tables, it shall have its funding determined using the last

funding modification listed.

(d) The merged company savings shall be determined on an individual

basis for each merged company. It shall be calculated by subtracting the

amount of such company's merged company funding from the amount the

merged companies would have received if they had maintained separate

contracts.

(e) The per group award shall equal the total funding available minus

the amount for the contract with the neighborhood preservation

coalition, which shall equal the total unmerged company funding plus the

sum of the merged company funding plus the sum of the merged company

savings.

§ 905 — Periodic review of contract performance; renegotiation and termination of contract

Periodic review of contract performance; renegotiation and

termination of contract. 1. The division shall, by regulation as

hereinafter provided, provide for formal evaluation of the performance

of a company to determine its progress in achieving the objectives

outlined in the annual neighborhood preservation plan contained in its

contract with the division. Such evaluation shall include a review of

the efforts of the company to execute each of the components of its plan

and a consultation between the company and the division regarding the

findings of the division relative to performance. The division shall

provide or cause to be provided technical assistance determined to be

necessary by the division to improve the ability of the company to

execute each of the components of its plan. Such evaluation and

determination of the need for technical assistance shall consider the

financial and staff resources of the company for the period evaluated

and any special considerations which may have had an impact on

performance during the period.

2. If the division determines that a company has not made sufficient

progress toward achieving the objectives of its annual neighborhood

preservation plan the division shall conduct a site visit to review

these findings and, if warranted, shall place the company on probation.

3. The division shall terminate or not renew or not extend a contract

in accordance with provisions of subdivision six of section nine hundred

three of this article if the commissioner determines that the

performance of a company is not sufficient to merit continued

participation in the program.

4. Notwithstanding the foregoing, the commissioner may terminate any

contract upon a finding of substantial non-compliance or other

substantial breach of the contract.

§ 906 — Technical services and assistance to neighborhood preservation companies

Technical services and assistance to neighborhood preservation

companies. 1. The division is hereby authorized to render to

neighborhood preservation companies such technical services and

assistance as it may possess or as may be available to it to enable such

companies to comply with the intent and provisions of this article. The

division is further authorized to take all steps necessary to encourage

the formation, organization and growth of new neighborhood preservation

companies. The division may also, from funds appropriated for the

purposes of this article, contract with municipal and other public

agencies and with private persons, firms and corporations for the

provision of such technical services and assistance which may include:

preparation and submission of proposals for entering into contracts with

the commissioner; preparation and submission of reports required under

such contracts or regulations issued by the commissioner; internal

organization and management of the neighborhood preservation companies;

recruitment and training of personnel of the neighborhood preservation

companies; preparation of plans and projects, negotiation of agreements

and compliance with requirements of programs in which neighborhood

preservation companies may become engaged in the course of their

neighborhood preservation activities; and other technical advice or

assistance relating to the performance or rendition of neighborhood

preservation activities.

2. The affordable housing corporation, the housing trust fund

corporation or their designee as the case may be, shall provide an

incentive grant to each company that is awarded a contract pursuant to

article eighteen or nineteen of this chapter. Such incentive grant shall

consist of the payment of an additional sum of money equal to three

percent of the amount payable to such company pursuant to each contract

provided, however, that such payment shall not be counted against the

per dwelling unit total imposed by subdivision one of section eleven

hundred two of this chapter or the per dwelling unit limitation imposed

by subdivision one of section eleven hundred twelve of this chapter, and

provided further that such additional amount shall not exceed forty

thousand dollars per contract. Such incentive grant shall be utilized

either for purposes consistent with the provisions of this article or

for the cost of neighborhood preservation activities related to such

contract and shall not be subject to the limitation on the amount of

funds which may be received by companies contained in subdivision four

of section nine hundred three of this article. Such incentive grant

shall be added to and considered a payment under the contract for

purposes of allocating funds to any single municipality.

§ 907 — Rules and regulations to be promulgated by the commissioner

Rules and regulations to be promulgated by the commissioner.

The commissioner shall issue and promulgate rules and regulations for

the administration of this article, which rules and regulations shall

include provisions concerning requirements as to eligibility for

contracting with the commissioner; the form of applications for

contracts; supervision and evaluation of neighborhood preservation

companies including standards and performance criteria for continued,

increased or decreased funding to insure the companies meet the

objectives of this article and the objectives outlined in their

neighborhood preservation plans; reporting, budgeting and record keeping

requirements; provisions for renegotiation, modification, termination,

extension and renewal of contracts, which provisions shall include the

bases for funding increases from the preceding contract including, but

not be limited to, performance which exceeds minimum performance

criteria and provisions for probationary periods where appropriate;

provisions for technical services and assistance to neighborhood

preservation companies within the limits of available funding;

protection of the interests of tenants in buildings owned or managed by

neighborhood preservation companies; and such other matters not

inconsistent with the purposes and provisions of this article as the

commissioner shall deem necessary, proper or appropriate. Such rules and

regulations shall prohibit any neighborhood preservation company

receiving funds under contracts entered into pursuant to this article

(i) from engaging in any activities promoting any political candidate or

party or (ii) from expending any such funds in activities the purpose of

which is to influence legislation.

§ 908 — Applicability of other laws to neighborhood preservation companies

Applicability of other laws to neighborhood preservation

companies. Nothing contained in this article shall be deemed or

construed to prevent or deny to any neighborhood preservation company

the opportunity to qualify as a developer, sponsor, owner or other

participant in accordance with the provisions of any article of this

chapter, or pursuant to any other law of the state or to deny to any

such company the privileges or immunities of any other provisions of

this chapter or other law, nor shall any neighborhood preservation

company be precluded from organizing or causing to be organized or from

acquiring any other corporation for the purpose of conducting or

carrying out any project, program or service authorized by any law of

the state.

§ 909 — Annual report

Annual report. The commissioner shall, on or before December

thirty-first in each year submit a report to the legislature on the

implementation of this article. Such report shall include, but not be

limited to, for each company receiving payments under this article: a

description of such company's contract amount and cumulative total; the

specific neighborhood preservation activities performed by such company;

the findings required by the commissioner under subdivision two of

section nine hundred three of this article; the amounts of monies

received by the company from sources other than payments made pursuant

to this article; the value of services rendered for the benefit of the

company for which payment is not required to be made; and such other

information as the commissioner deems appropriate.

§ 910 — Merged company savings fund

Merged company savings fund. The division shall create a fund

to hold and shall transfer all funds determined to be merged company

savings pursuant to paragraph (d) of subdivision five of section nine

hundred four of this article into such fund. The division shall use such

funds, as available, for entering into new contracts, pursuant to

section nine hundred three of this article, with neighborhood

preservation companies located in areas of the state that are currently

unserved by a neighborhood preservation company.

ARTICLE 16-A Urban Initiatives

§ 920 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that there exists in New York state a serious

need for the restoration and improvement of housing, local commercial

areas and public facilities in distressed urban neighborhoods and that

the state should encourage the revitalization of such neighborhoods;

that not-for-profit community-based organizations and charitable

organizations that have a direct interest in improving the health,

safety and economic viability of a distressed urban neighborhood can

play a crucial role in such revitalization; the legislature therefore

finds that a program should be established to fund not-for-profit

community-based organizations and charitable organizations to improve

distressed urban neighborhoods by preserving existing housing units,

generating new housing units, upgrading commercial and retail areas, and

by creating innovative approaches to neighborhood and community

revitalization which improve cultural and community facilities and

spirit.

§ 921 — Definitions

Definitions. As used in this article:

1. "Commissioner" shall mean the commissioner of the state division of

housing and community renewal.

2. "Division" shall mean the division of housing and community

renewal.

3. "Eligible applicant" shall mean a not-for-profit corporation or

charitable organization, organized for a period of one or more years,

which is either incorporated under the not-for-profit corporation law

(or such law together with any other applicable law) or, if

unincorporated, is not organized for the private profit or benefit of

its members and has been engaged primarily in community preservation

activities.

4. "Municipality" shall mean any unit of local government within the

state with a population of more than twenty thousand persons.

5. "Neighborhood" shall mean an area within the municipality

identified by recognized or established boundaries consistent with a

determination of neighborhood eligibility under article sixteen of this

chapter.

6. "Urban initiatives projects" or "projects" shall mean a specific

work or series of works for the revitalization and improvement of a

neighborhood through creation, preservation or improvement of

residential housing units; preservation or improvement of local

commercial facilities and public facilities or other aspects of the area

environment which include as part of its project the creation,

preservation or improvement of residential housing units.

7. "Persons of low income" shall mean those persons and families whose

incomes do not exceed eighty percent of the median income for the

metropolitan statistical area in which a project is located.

8. "Corporation" shall mean the housing trust fund corporation

established in section forty-five-a of this chapter.

9. "Division urban initiatives program" shall mean the program

heretofore administered by the division pursuant to appropriations and

reappropriations for the purposes of urban initiatives programs.

§ 922 — Urban initiative contracts

Urban initiative contracts. 1. Within the limit of funds

available in the urban initiative program, the corporation is hereby

authorized to enter into contracts with eligible applicants to provide

state financial assistance for the project costs attributable to urban

initiatives projects within neighborhoods. The state financial

assistance shall be either in the form of payments, grants or loans, as

the corporation shall determine. No more than fifty percent of the total

amount appropriated pursuant to this article in any fiscal year shall be

allocated to urban initiatives projects located within any single

municipality.

2. The total state payment pursuant to any one contract shall not

exceed two hundred thousand dollars and the contract shall provide for

completion of the project within a reasonable period, as specified

therein which shall not in any event exceed two years from its

commencement. Up to ten percent of the project cost may be used for the

eligible applicant's operating expenses including expenses related to

organization operating support and administration of the contract.

3. The corporation shall require that, in order to receive funds

pursuant to this article, the eligible applicant must submit an

operating plan which shall include but not be limited to project

feasibility, leveraging, impact on the community, group capability, and

affirmative action and minority business participation. Such plan shall

be submitted pursuant to a request for proposals issued by the

corporation.

4. The eligible applicant which proposes to contract with the

corporation shall be a bona fide organization or a successor

organization with appropriate experience in community revitalization

activities and shall demonstrate by its immediate past and current

activities that it has, or shows that it can acquire, the capability and

expertise to successfully complete the proposed project. The eligible

applicant's officers, directors and members must be representative of

the residents and other legitimate interests of the neighborhood.

5. Occupant selection procedures shall be established which provide

that any lawful occupants who live in a project prior to rehabilitation

shall not be displaced as a result of such rehabilitation, other than

temporarily, in which case suitable relocation arrangements shall be

provided, and that any additional occupants who move into a project are

persons of low income. Preference in selection of such additional

occupants (i) shall be given to persons or families with the lowest

incomes possible, given the income requirements of the project; and (ii)

shall also be given to persons or families whose current housing fails

to meet basic standards of health and safety and who have little

prospect of improving the condition of their housing except by residing

in a project receiving payments, grants or loans under this article.

6. For any application for such a contract under this article, the

corporation shall provide the applicant with a list of conditions that

must be met prior to entering into a contract pursuant to this article.

Within fifteen working days of receipt by the corporation of all

documents in satisfaction of the list, the corporation shall notify the

applicant of the sufficiency or insufficiency of the documents. After

satisfaction by the applicant of all conditions required by the

corporation prior to entering into a contract the corporation shall

enter into the contract within forty-five working days of satisfaction

of such conditions.

§ 923 — General and administrative provisions

General and administrative provisions. 1. The corporation shall

issue and promulgate rules and regulations for the administration of

this article. The rules and regulations shall include provisions

concerning the eligibility of applicants for payments, grants and loans

under this article; funding criteria and the funding determination

process; supervision and evaluation of contracting applicants;

reporting, budgeting and record-keeping requirements; provisions for

modification and termination of contracts; and such other matters not

inconsistent with the purposes and provisions of this article as the

corporation shall deem necessary or appropriate.

2. The corporation shall provide for the review, at periodic

intervals, of the performance of the not-for-profit corporations and

charitable organizations receiving financial assistance pursuant to this

article. Such review shall, among other things, be for the purposes of

ascertaining conformity to contractual provisions, the financial

integrity and efficiency of the organizations and the evaluation of the

project.

§ 924 — Transfer of authority, administration and appropriations

Transfer of authority, administration and appropriations. 1. On

and after the effective date of this article, all obligations of the

division with respect to the division urban initiatives program shall

become the obligations of the corporation and the corporation shall be

responsible for the administration of the division urban initiatives

program. The division shall provide for the orderly transfer of all

matters, records and things relating to such program to the corporation.

2. Notwithstanding the provisions of any general or special law, the

director of the budget is authorized to transfer to the corporation

funds otherwise appropriated or reappropriated for the purposes of the

division urban initiatives program from the division of housing and

community renewal.

3. All rules, regulations, acts, determinations and decisions of the

division or the commissioner with respect to the administration of the

division urban initiatives program in force on the effective date of

this section shall continue in force and effect as rules, regulations,

acts, determinations and decisions of the corporation until duly

modified or rescinded by the corporation.

ARTICLE 17 Housing and Community Preservation In Rural Areas

§ 1001 — Legislative findings and statement of policy

Legislative findings and statement of policy. The legislature

hereby finds and declares that there exist in certain rural areas of the

state significant unmet housing needs of persons and families of low or

moderate income, numerous housing units which are deteriorating or in

need of rehabilitation or improvement, and related factors demonstrating

a need for increased attention to housing preservation and community

revitalization in such areas. Meeting the housing and community renewal

needs of rural areas entails special problems arising from the dispersal

of population over wide areas, the existence of substandard areas in the

form of small, often isolated, pockets of poverty rather than massive

concentrations, the extremely limited resources of the small units of

local government involved, and other characteristics of these areas.

Locally based not-for-profit organizations can play a crucial role in

housing preservation and community revitalization. The public policy of

support for such organizations embodied in article sixteen of this

chapter, and the legislative findings set forth in such article, are

hereby reaffirmed. The legislature further finds and determines that the

needs of rural areas and of existing and potential not-for-profit

organizations serving such areas will be best met by a program of

support for such organizations and their activities similar to that in

article sixteen of this chapter but recognizing the distinctive

characteristics of such areas. It is the purpose of this article to

establish such a program within the division of housing and community

renewal.

It is further declared to be the public policy of the state that all

programs of housing and community assistance administered by the

division of housing and community renewal or other agencies should be

carried out with due regard for the special conditions in and needs of

the rural areas of the state.

§ 1002 — Definitions

Definitions. As used in this article, the following terms

shall have the following meanings:

1. "Commissioner" shall mean the commissioner of the state division of

housing and community renewal.

2. "Division" shall mean the state division of housing and community

renewal.

3. "Rural area of the state" shall mean cities, towns and villages

having a population of less than twenty-five thousand.

4. "Region" shall mean those portions of the rural area of the state,

as specified in the contract entered into pursuant to this article,

within which housing and community renewal activities funded in part

pursuant to this article are to be carried out.

5. "Housing preservation and community renewal activities" include (a)

the new construction or the acquisition, maintenance, preservation,

repair, rehabilitation or other improvement of vacant or occupied

housing accommodations; demolition or sealing of vacant structures where

necessary or appropriate; disposition of housing accommodations to

present or potential occupants or co-operative organizations; training

or other forms of assistance to occupants of housing accommodations;

administration of landlord training classes; and management of housing

accommodations as agent for the owners, receivers, administrators or

municipalities; (b) activities, similar to those specified in paragraph

(a) of this subdivision, aimed at accomplishing similar purposes and

meeting similar needs with respect to retail and service establishments

within a region when carried out in connection with and incidental to a

program of housing related activities.

6. "Persons of low income" shall mean individuals and families whose

annual incomes do not exceed ninety per cent of the median annual income

for all residents of the region within which they reside or a larger

area encompassing such region for which median annual income can be

determined.

7. "Merged corporation" shall mean a not-for-profit corporation

maintaining a contract pursuant to section one thousand three of this

article that has undergone a merger with one or more other

not-for-profit corporation, which is also maintaining a contract

pursuant to section one thousand three of this article, that has led the

merged corporations to reduce the number of contracts being maintained

with the division pursuant to section one thousand three of this article

to a total of one.

8. "Unmerged corporation" shall mean a not-for-profit corporation that

is not a merged corporation.

§ 1003 — Contracts with not-for-profit corporations for housing preservation and community renewal activities

Contracts with not-for-profit corporations for housing

preservation and community renewal activities. 1. The commissioner may

enter into contracts with corporations incorporated pursuant to the

not-for-profit corporation law (or such law together with any other

applicable law) for the performance of housing preservation and

community renewal activities within a region, subject to the provisions

of this article.

2. Prior to entering into a contract with a corporation, the

commissioner shall have made a finding that the region in which the

activities are proposed to be conducted contains a significant amount of

deteriorating or substandard housing which is not being adequately

repaired, renovated, upgraded, modernized or rehabilitated under

existing programs so as to provide sound housing at costs which the

residents of such region can afford; that the corporation which proposes

to contract with the commissioner is a bona fide organization which

shall have been in existence either as a corporation or as an

unincorporated, organized group and performing significant housing

preservation and community renewal activities for at least one full year

prior to entering into any contract with the commissioner and which

shall have demonstrated by its immediate past and current activities

that it has the ability to preserve, repair, maintain, renovate,

rehabilitate, manage or operate housing accommodations or to engage in

other housing preservation and community renewal activities in such

region; that the housing preservation and community renewal activities

which are to be performed pursuant to the proposed contract are needed

by the region; and that the corporation possesses or will acquire or

gain access to the requisite staff, office facilities with direct access

to such region, equipment and expertise to enable it to perform the

activities which it proposes to undertake pursuant to such contract;

provided, however, that merged corporations' office facilities may be

located outside such region if they are located in a municipality wholly

contained within the merged corporations' region, and provided further,

however, that it shall not be a bar to the commissioner's contracting

with a corporation that one or more other organizations, are conducting

housing preservation and community renewal activities wholly or

partially within the same region whether or not pursuant to contract

with the commissioner.

3. The commissioner may enter into a contract pursuant to this section

only if he determines:

(a) that the region proposed to be served by the applicant is an

appropriate portion of the rural area of the state for the performance

of activities pursuant to this article by a corporation;

(b) that such region contains significant unmet housing needs of

persons of low income, that a substantial portion of its population

consists of such persons, and that the housing stock in the region,

because of its age, deterioration, or other factors, requires

improvement in order to preserve the communities within the region;

(c) that the particular activities to be performed by the corporation

will meet one or more needs of the region and are reasonably calculated

to have a positive effect on regional preservation, stabilization or

improvement;

(d) that the corporation's officers, directors and members are fairly

representative of the residents and other legitimate interests of the

region, that they may be expected to carry out the contract in a

responsible manner, and that a majority of the directors of the

corporation are residents of the region;

(f) that any fees received or proposed to be received by the

corporation in connection with its activities pursuant to the contract

are fair and reasonable;

(g) that the corporation will, to the extent possible, give preference

in hiring to residents of the region who are unemployed or

underemployed;

(h) that the corporation will, to the maximum extent feasible, dispose

of residential buildings owned or to be acquired by it to the occupants

thereof or to cooperative groups whose members shall be occupants

thereof; and

(i) that due consideration will be given to the interests of occupants

of properties owned or to be acquired by the corporation.

4. Contracts pursuant to this section shall be for a period of no more

than one year, but may be renewed or extended from year to year; they

shall define with particularity the region or portion thereof within

which the housing preservation and community renewal activities shall be

performed; they shall specify the nature of the housing preservation and

community renewal activities which shall be performed including the

approximate number of buildings, residential dwelling units and local

retail and service establishments which shall be affected; they shall

locate and describe, with as much particularity as is reasonably

possible, the buildings with respect to which such activities shall be

performed during the contract term; and they shall specify the number of

persons, salaries or rates of compensation and a description of duties

of those who shall be engaged by the corporation to perform the

activities embraced by the contract together with a schedule of other

anticipated expenses.

5. Prior to renewing or extending a contract or entering a succeeding

contract with a corporation the division shall determine that:

(a) the corporation shall have substantially completed the housing

preservation and community renewal activities specified in the contract

to be renewed, extended, or succeeded;

(b) the corporation shall have received the sums, services, and funds

specified in subdivision four of section one thousand four of this

article; and

(c) the activities carried out by the corporation pursuant to its

contract shall have had a significant impact on the community's needs as

specified in the contract.

6. Prior to terminating, not renewing or not extending a contract the

division shall:

(a) determine that the corporation is in violation of the terms and

conditions of the contract or that funds provided pursuant to the

contract are being expended in a manner not consistent with the terms of

the contract or the provisions of this article; or

(b) determine that necessary and appropriate technical assistance has

been provided without significant improvement in the activities of the

corporation; and

(c) provide the corporation with written notice, at least forty-five

days in advance, of its intent to terminate, not renew or not extend the

contract and provide the corporation with an opportunity to appear and

be heard before the division with respect to the reasons for such

proposed termination, non-renewal or non-extension. At the same time

that the corporation is notified of the division's intent to terminate,

not renew or not extend the contract, the division shall likewise inform

the senate and assembly members who represent areas within such

corporation's geographic boundaries.

7. The division shall establish, for renewal of contracts, a procedure

which provides the corporation with at least forty-five days notice of

the corporation's obligations and rights in that process, informs the

corporation of the amount of the renewal contract, and facilitates the

timely execution of the contract and disbursement of funds.

8. The division may temporarily withhold payments and may elect not to

renew or extend a contract or enter a succeeding contract with any

not-for-profit corporation if the corporation is not in compliance with

its contract, has without good cause failed to submit documentation

required under contract or requested by the division to make the

determinations required under subdivision five of this section or has

not satisfied any other conditions consistent with this article for

renewing or extending a contract or entering a succeeding contract.

§ 1004 — Payments pursuant to contracts

Payments pursuant to contracts. 1. Each contract entered into

pursuant to this article shall provide for payment to the corporation

for the housing preservation and community renewal activities to be

performed by it.

2. Payments pursuant to this section shall be restricted to sums

required for the compensation of persons employed by, and consultants

retained by, the corporation for the performance of the activities

covered by the contract and other costs and expenses directly related to

such employees and consultants.

3. No part of any such payment shall be used to defray in whole or in

part the cost of acquisition, improvement, rehabilitation, operation or

demolition of any building or other structure, but this provision shall

not prohibit the use of such funds for planning any such activity or for

the expenses of providing office and related facilities for the

corporation for use in carrying out its activities pursuant to the

contract. Payments shall be made by the division to the corporation at

such periods, not less frequently than semi-annually, as shall be

provided in the contract. Such payments shall be made at or prior to the

commencement of each such time period, to compensate the corporation for

the activities which are to be carried out during such time period

provided, that with respect to contracts entered into on or after June

thirtieth, nineteen hundred ninety-seven the first such payment shall be

made by the division beginning on or after July first of the fiscal year

for which an appropriation in support of such payment was made and

provided further that the final such payment to the corporation shall be

made no later than March thirty-first of such fiscal year, unless such

payment has been withheld pursuant to subdivision eight of section one

thousand three of this article.

4. In negotiating each contract, the division shall consider and take

into account any and all other sums available or anticipated to be made

available to the corporation from any and all sources which may be used

to defray the costs of the housing preservation and community renewal

activities set forth in the contract, including, without limitation,

fees generated by the management of housing accommodations,

contributions from private foundations, corporations, firms and

individuals and funds received under grants and contracts pursuant to

any program or programs operated or administered by any governmental

agency or instrumentality and shall make a determination that the sums

available or anticipated to be made available for the corporation from

such other sources, together with the value of services to be rendered

for the benefit of the corporation for which payment is not required to

be made by such corporation, amount to at least thirty-three and

one-third percent of the amount of such contract.

5. When disbursing funds for contracts with not-for-profit

corporations, pursuant to section one thousand three of this article,

the division shall use the following criteria, formulas and tables to

determine the distribution of funds:

(a) (i) The total unmerged corporation funding shall equal the current

number of unmerged corporation contracts multiplied by the per group

award.

(ii) The unmerged corporation funding shall equal the per group award.

(iii) The merged corporation funding shall equal the funding

modification multiplied by the per group award.

(b) Merged corporation funding shall be determined on an individual

basis for each not-for-profit corporation. The following tables show the

funding modification to be used:

(i) In the case of two not-for-profit corporations merging, the

following table shall be used:

Years since Funding

merger modification

1 200%

2 190%

3 180%

4 170%

5 160%

6 150%

(ii) In the case of three not-for-profit corporations merging, the

following table shall be used:

Years since Funding

merger modification

1 300%

2 290%

3 280%

4 270%

5 260%

6 250%

7 240%

8 230%

9 220%

10 210%

11 200%

(iii) In the case of four or more not-for-profit corporations merging,

the following table shall be used:

Years since Funding

merger modification

1 400%

2 390%

3 380%

4 370%

5 360%

6 350%

7 340%

8 330%

9 320%

10 310%

11 300%

12 290%

13 280%

14 270%

15 260%

16 250%

(c) If a not-for-profit corporation that has undergone a merger

continues to renew their contract beyond the timeframes listed in the

above tables, it shall have its funding determined using the last

funding modification listed.

(d) The merged corporation savings shall be determined on an

individual basis for each merged corporation. It shall be calculated by

subtracting the amount of such corporation's merged corporation funding

from the amount the merged corporations would have received if they had

maintained separate contracts.

(e) The per group award shall equal the total funding available minus

the amount for the contract with the rural preservation coalition which

shall equal the total unmerged company funding plus the sum of the

merged company funding.

§ 1005 — Enforcement of standards for contract performance

Enforcement of standards for contract performance. 1. The

division shall by regulation provide for formal evaluation of the

performance of a corporation to determine its progress in achieving the

objectives outlined in the annual housing preservation and community

renewal plan contained in its contract with the division. Such

evaluation shall include a review of the efforts of the corporation to

execute each of the components of its plan and a consultation between

the corporation and the division regarding the findings of the division

relative to performance. The division shall provide or cause to be

provided technical assistance determined to be necessary by the division

to improve the ability of the corporation to execute each of the

components of its plan. Such evaluation and determination of the need

for technical assistance shall consider the financial and staff

resources of the corporation for the period evaluated and any special

considerations which may have had an impact on performance during the

period.

2. If the division determines that a corporation has not made

sufficient progress toward achieving the objectives of its annual

housing preservation and community renewal plan the division shall

conduct a site visit to review these findings and, if warranted, shall

place the corporation on probation.

3. The division shall terminate or not renew or not extend a contract

in accordance with provisions of subdivision seven of section one

thousand three of this article if the commissioner determines that the

performance of a corporation is not sufficient to merit continued

participation in the program.

4. Notwithstanding the foregoing, the commissioner may terminate any

contract upon a finding of substantial non-compliance or other

substantial breach of the contract.

§ 1006 — Technical services and assistance to corporations and rural areas

Technical services and assistance to corporations and rural

areas. 1. In accordance with the policy of this article, the division

shall encourage the creation, development and strengthening of new

not-for-profit corporations to perform housing preservation and

community renewal activities in the rural areas of the state, and is

authorized to take all steps necessary to that end. The division shall

provide technical services and assistance to not-for-profit corporations

seeking to serve the housing or community renewal needs of rural areas,

to better enable such corporations to meet the requirements of, and

obtain funding under this article or any other program of governmental

assistance, federal, state or local, to carry out their present and

proposed activities, and otherwise to further the purposes and policy of

this article. Such services and assistance may be provided through the

division's own personnel and facilities, through contractual services,

or otherwise.

2. The affordable housing corporation or the housing trust fund

corporation, as the case may be, shall provide an incentive grant to

each corporation that is awarded a contract pursuant to article eighteen

or nineteen of this chapter. Such incentive grants shall consist of the

payment of an additional sum of money equal to three percent of the

amount payable to such corporation pursuant to each contract provided,

however, that such payment shall not be counted against the per dwelling

unit total imposed by subdivision one of section eleven hundred two of

this chapter or the per dwelling unit limitation imposed by subdivision

one of section eleven hundred twelve of this chapter, and provided

further that such additional amount shall not exceed forty thousand

dollars per contract. Such incentive grant shall be utilized either for

purposes consistent with the provisions of this article or for the cost

of housing preservation and community renewal activities related to such

contract and shall not be subject to the limitation on the amount of

funds which may be received by corporations contained in subdivision

four of section one thousand three of this article. Such incentive grant

shall be added to and considered a payment under the contract for

purposes of allocating funds to any single municipality.

§ 1007 — Rules and regulations

Rules and regulations. The commissioner shall issue rules and

regulations for the administration of this article. Such rules and

regulations shall include provisions concerning requirements as to

eligibility for contracting with the commissioner; the form of

applications for contracts; supervision and evaluation of corporations

which contract with the commissioner including standards and performance

criteria for continued, increased or decreased funding to insure the

corporations meet the objectives of this article and the objectives

outlined in their housing preservation and community renewal plans;

reporting, budgeting and record keeping requirements; provisions for

renegotiation, modification, termination, extension and renewal of

contracts, which provisions shall include the bases for funding

increases from the preceding contract including, but not be limited to,

performance which exceeds minimum performance criteria and provisions

for probationary periods where appropriate; provisions for technical

services and assistance to such corporations within the limits of

available funding; protection of the interests of tenants in buildings

owned or managed by such corporations; and may include any provisions,

not inconsistent with the provisions of this article or other applicable

law, which the commissioner deems necessary or appropriate to carry out

the policy and purposes of this article. Such rules and regulations

shall prohibit any corporation receiving funds under contracts entered

into pursuant to this article (i) from engaging in any activities

promoting any political candidate or party or (ii) from expending any

such funds in activities the purpose of which is to influence

legislation.

§ 1008 — Relationship to other laws

Relationship to other laws. Nothing in this article shall be

deemed to deny or limit the right of any corporation to seek or receive

assistance under, or otherwise participate in, any other program

pursuant to this chapter, or any other governmental program relating to

housing or community renewal. Nothing in this article shall be deemed to

deny or limit the right of any corporation to carry out any program or

service through a subsidiary corporation or other instrumentality.

§ 1009 — Annual report

Annual report. The commissioner shall, on or before December

thirty-first in each year submit a report to the legislature on the

implementation of this article. Such report shall include, but not be

limited to, for each company receiving payments under this article: a

description of such company's contract amount and cumulative total; the

specific housing and community preservation activities in rural areas

performed by such company; the findings required by the commissioner

under subdivision two of section one thousand three of this article; the

amounts of monies received by the company from sources other than

payments made pursuant to this article; the value of services rendered

for the benefit of the company for which payment is not required to be

made; and such other information as the commissioner deems appropriate.

§ 1010 — Rural aging services

Rural aging services. Housing preservation and community

renewal activities which are otherwise eligible under subdivision five

of section one thousand two of this article, but which are or have been

funded under the rural aging services program operated jointly by the

division and the state office for the aging, shall not be subject to the

limitation on the amount of funds which may be received by corporations

contained in subdivision four of section one thousand three of this

article. All provisions otherwise applicable to funds received under

section one thousand three of this article shall also apply to funds

received under this section.

§ 1011 — Merged company savings fund

Merged company savings fund. The division shall create a fund

to hold and shall transfer all funds determined to be merged corporation

savings pursuant to paragraph (d) of subdivision five of section one

thousand four of this article into such fund. The division shall use

such funds, as available, for entering into new contracts, pursuant to

section one thousand three of this article, with not-for-profit

corporations located in areas of the state that are currently unserved

by a not-for-profit corporation that is maintaining a contract pursuant

to section one thousand three of this article.

ARTICLE 17-A Rental Assistance Program For Rural Areas

§ 1020 — Legislative findings and statement of policy

Legislative findings and statement of policy. The legislature

hereby finds that in certain rural areas of the state significant

numbers of low income residents are unable to obtain decent housing. The

normal operation of the private market has not addressed their needs.

The elderly and families are especially affected by the lack of

housing in rural areas. Elderly persons are frequently forced to choose

between continuing to live in homes which have become too large to care

for and use well or leaving their communities to live elsewhere.

Families, particularly those just beginning, are often faced with either

substandard, unsafe housing, living with relatives in overcrowded

conditions, or leaving their communities. The ensuing social and

economic disruption has profoundly adverse effects on the rural

communities as well as the residents.

Numerous housing programs have been initiated by the federal

government to provide housing for those of low income. For the most

part, these programs have worked best in areas of high population

density, thus effectively, although unintentionally, failing to fulfill

their intent in rural areas.

The legislature further finds that locally based housing providers can

effectively serve the needs of low and moderate income persons in rural

areas. Their efforts have been severely limited, however, by the

contemporary high cost of financing, inflation and massive retrenchment

in federal housing assistance programs.

The legislature further finds it to be in the best interests of the

people of New York state to assist local housing providers in meeting

the needs of low income occupants in rural areas by supplementing

federal assistance programs with a program of state rental assistance

payments similar to the federal Farmer's Home Administration Program.

§ 1021 — Definitions

Definitions. As used in this article, any term defined in

article seventeen of this chapter shall have the same meaning herein as

set forth therein and the following terms shall have the following

meanings:

1. "Federal assistance" means assistance from the Farmer's Home

Administration pursuant to title five of the United States Housing Act

of 1949.

2. "Eligible sponsor" means either a corporation organized pursuant to

the not-for-profit corporation law, a public housing authority as

defined pursuant to subdivision two of section three of the public

housing law, or an eligible borrower as defined in Title V of the United

States Housing Act of 1949.

3. "Eligible project" means a housing project located in a rural area

which is to be owned or operated by an eligible sponsor and which has

received (or which the sponsor has demonstrated to the satisfaction of

the commissioner will receive) federal assistance.

§ 1023 — Rural housing assistance contracts

Rural housing assistance contracts. 1. The commissioner may

enter into contracts with eligible sponsors for the provision, in

eligible projects, of housing for persons of low income. Such contracts

shall provide for the payment by the division to the sponsor of periodic

rental assistance payments with respect to the housing accommodations

occupied by such persons.

2. Such contracts may, subject to the availability of moneys in the

rural housing assistance fund, commit the division to make such payments

for a period of up to five years from the date of completion of the

eligible project. Any such contract shall provide that the sponsor shall

not withdraw the project, or any units therein, from the program during

such period except for good cause as provided therein. Notwithstanding

any provision of this chapter, all contracts shall terminate after five

years or when the actual dollar amount as stipulated in the contract has

been expended, whichever is sooner. For any application for such a

contract under this article, the division shall provide the applicant

with a list of conditions that must be met prior to entering into a

contract pursuant to this article. Within fifteen working days of

receipt by the division of all documents in satisfaction of the list,

the division shall notify the applicant of the sufficiency or

insufficiency of the documents. After satisfaction by the applicant of

all conditions required by the division prior to entering into a

contract the division shall enter into the contract within forty-five

working days of satisfaction of such conditions.

§ 1024 — Payments pursuant to contracts

Payments pursuant to contracts. 1. Payments shall be made

monthly or on such other periodic basis as may be provided in the

contract. Each such payment shall equal, for each unit in the project

covered by the contract, the difference between the project rent

established pursuant to subdivision two of this section and the tenant

rent payment established pursuant to subdivision three of this section.

2. The project rent shall be: (a) in the case of a housing company

regulated by the state pursuant to this chapter, the current maximum

lawful rent for the unit; (b) in the case of a housing company regulated

by a municipality pursuant to this chapter, the current maximum lawful

rent for the unit, subject to such additional limitations and conditions

as the commissioner may prescribe by contract; or (c) in the case of any

other sponsor, the rent established or approved by the commissioner as

prescribed in the contract.

3. The tenant rent payment shall be an amount computed pursuant to the

regulations of the commissioner, which regulations shall prescribe a

formula substantially similar to that currently provided pursuant to

title five of the United States Housing Act of 1949, as amended.

§ 1025 — Administrative provisions

Administrative provisions. 1. The commissioner shall provide,

by regulations, for the administration of the provisions of this

article. Such regulations shall include, but need not be limited to,

provisions for operation of the project by the sponsor in a manner

consistent with the intent of this article.

2. Every contract entered into pursuant to this article shall obligate

the sponsor not to charge or collect from any tenant of a unit covered

by such contract a rent higher than the tenant rent payment established

pursuant to section one thousand twenty-four of this article.

3. Rental assistance payments pursuant to this article may be pledged

by the sponsor in connection with the financing or refinancing of a

project, subject to any conditions prescribed in the housing assistance

contract, but no such pledge shall create any obligation or liability on

the part of the state or any agency or instrumentality thereof other

than that prescribed in the contract.

4. Nothing in this article shall prevent any sponsor from seeking or

accepting any other form of governmental subsidy or assistance, but any

contract pursuant to this article shall provide for appropriate

adjustments in the rental assistance payments to reflect such other

subsidy or assistance.

ARTICLE 17-B Rural Area Revitalization Projects

§ 1051 — Legislative findings and statement of policy

Legislative findings and statement of policy. The legislature

hereby finds and declares that there exists in many portions of the

rural areas of the state substantial needs for revitalization and

improvement of housing and of local commercial and service facilities,

and for related community renewal activities. The findings set forth in

article seventeen of this chapter, with respect to the special needs and

problems of such areas and the significant potential role of locally

based not-for-profit organizations in helping to meet such needs, are

hereby reaffirmed. The legislature hereby determines that, in addition

to the program of state support to help meet the administrative expenses

of such organizations under article seventeen, a further public need

exists for state funding of a portion of the costs of specific

revitalization projects carried out by such groups and similar local

organizations. It is the purpose of this article to encourage community

preservation and improvement in the rural area of the state by

establishing a program of such funding.

§ 1052 — Definitions

Definitions. As used in this article:

(a) all terms defined in article seventeen of this chapter shall have

the same meanings herein as specified therein; and

(b) the following terms shall have the following meanings:

(1) "rural area revitalization project" means a specific work or

series of works for the revitalization and improvement of a region of

the rural area of the state through creation, preservation or

improvement of housing resources; creation, preservation or improvement

of local commercial facilities; restoration or improvement of public

facilities or other aspects of the area environment; related community

preservation or renewal activities; or any combination of the above.

(2) "qualified applicant" means a not-for-profit corporation under

contract pursuant to article seventeen of this chapter or any other

locally based organization which is either incorporated under the

not-for-profit corporation law (or such law together with any other

applicable law) or, if unincorporated, is not organized for the private

profit or benefit of its members.

(3) "Corporation" means the housing trust fund corporation established

in section forty-five-a of this chapter.

§ 1053 — Contracts for rural area revitalization projects

Contracts for rural area revitalization projects. 1. The

corporation may, in the name of the state, enter into contracts with

qualified applicants for the performance of rural area revitalization

projects.

2. The corporation may enter into a contract pursuant to this section

only if he determines that:

(a) the region to be served is a portion of the rural area of the

state which is in need of revitalization and can benefit from a program

carried out by one or more locally based groups.

(b) the applicant organization, or any predecessor organization, has

had appropriate experience in community preservation activities; that it

has, or shows that it can acquire, the capability and expertise to

undertake successfully the proposed project; and that it is managed and

directed by persons representative of the region within which it

operates.

(c) the project or projects, alone or in combination with other

proposed activities of the applicant or others, will be likely to

contribute in a significant way towards the revitalization and general

community renewal of the region.

3. Each contract pursuant to this section shall provide for payment by

the corporation for the activities to be carried out pursuant to the

contract. Such payment shall be based on the projected costs of such

activities and the other sources of funding which may be available to

the applicant (including, if applicable, funding pursuant to article

seventeen of this chapter) from any source. Up to ten percent of the

program or project cost may be used for the qualified applicant's

operating expenses including expenses related to organization operating

support and administration of the contract. The total state payment

pursuant to any one contract shall not exceed two hundred thousand

dollars.

4. The contract shall provide for completion of the project within a

reasonable period, as specified therein, which shall not in any event

exceed two years from its commencement.

5. For any application for such a contract under this article, the

corporation shall provide the applicant with a list of conditions that

must be met prior to entering into a contract pursuant to this article.

Within fifteen working days of receipt by the corporation of all

documents in satisfaction of the list, the corporation shall notify the

applicant of the sufficiency or insufficiency of the documents. After

satisfaction by the applicant of all conditions required by the

corporation prior to entering into a contract the corporation shall

enter into the contract within forty-five working days of satisfaction

of such conditions.

§ 1054 — Administration of contracts

Administration of contracts. 1. A contract pursuant to this

article may provide for such periodic payments as may be appropriate.

2. The corporation shall periodically review the performance of each

contractor pursuant to this article. Such reviews shall include

evaluation of the quality of the activities performed, the conformity

thereof to contract provisions and the financial integrity and

efficiency of the contractor.

3. Each contract pursuant to this article shall provide that:

(a) it may be modified and renegotiated from time to time; and

(b) it may be terminated by the corporation upon a finding of

substantial noncompliance or other breach of its terms by the

contractor.

§ 1055 — Rules and regulations

Rules and regulations. The corporation may provide, by

regulation, for the administration of the rural area revitalization

program. Such regulations may contain any provisions, not inconsistent

with this article as may be necessary or appropriate to carry out the

policy and intent of this article.

§ 1057 — Transfer of authority, administration and appropriations

Transfer of authority, administration and appropriations. 1.

On and after the effective date of this section, all obligations of the

division with respect to rural area revitalization projects shall become

the obligations of the corporation and the corporation shall be

responsible for the administration of all rural area revitalization

projects. The division shall provide for the orderly transfer of all

matters, records and things relating to rural revitalization projects to

the corporation.

2. Notwithstanding the provisions of any general or special law, the

director of the budget is authorized to transfer to the corporation

funds otherwise appropriated or reappropriated for the purposes of rural

area revitalization projects to the division of housing and community

renewal.

3. All rules, regulations, acts, determinations and decisions of the

division or the commissioner thereof with respect to the administration

of rural area revitalization projects in force on the effective date of

this section shall continue in force and effect as rules, regulations,

acts, determinations and decisions of the corporation until duly

modified or rescinded by the corporation.

ARTICLE 18 Low Income Housing Trust Fund Program

§ 1100 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that there is a serious shortage of decent

affordable housing in the state for persons of low income; that the cost

of providing such housing without public participation and assistance is

prohibitively high; that there exists throughout the state a significant

number of dwellings which are deteriorated and are vacant or

underutilized; that the existence of such properties creates a serious

threat to the health and safety of persons who live in or near them,

limits the availability of decent affordable housing to others,

contributes to the blight and deterioration of neighborhoods, and drains

municipal resources and expenditures; that the rehabilitation of these

properties would stem the deterioration of neighborhoods and promote the

preservation and creation of safe and sanitary low income housing; that

the potential exists to make such housing available to persons of low

income through projects carried out by eligible applicants to

rehabilitate these dwelling accommodations, bring these accommodations

into compliance with all applicable laws and regulations and remove all

hazardous and immediately hazardous code conditions; that the purposes

of this article should also be served by providing for new construction

of housing for persons of low income in areas in which rehabilitation

opportunities are limited or where new construction would prove to be

more effective; that the carrying out of such projects serves a

significant public purpose and may appropriately be performed by

eligible applicants; that payment for such services, tax exemptions and

other public participation in such projects would bring down the cost of

such housing and make it affordable to persons of low income; and that

it is the policy of the state to preserve and create such housing and to

provide for the aid, care, and support of the needy. The legislature

therefore finds that a program should be established to provide monies

for the rehabilitation and construction of these properties by eligible

applicants to promote the preservation and creation of affordable

housing for persons of low income.

It is intended that any payments, grants or loans provided to

municipalities through this program not substitute for funds which such

municipalities would have spent in the absence of this program and that

such payments, grants and loans will enable such municipalities to

expand their commitment to increase the supply of affordable low income

housing to levels greater than would have been possible without this

program.

§ 1101 — Definitions

Definitions. For the purposes of this article:

1. "Commissioner" shall mean the commissioner of the state division of

housing and community renewal.

2. "Corporation" shall mean the housing trust fund corporation

established by section forty-five-a of this chapter.

3. "Rehabilitation" shall mean all work necessary to bring a

residential property into compliance with all applicable laws and

regulations including but not limited to the installation, replacement

or repair of heating, plumbing, electrical and related systems and the

elimination of all hazardous and immediately hazardous violations in the

structure in accordance with state and local laws and regulations of

state and local agencies. Rehabilitation may also include reconstruction

or work to improve the habitability or prolong the useful life of the

residential property.

4. "Cooperative project" or "condominium project" shall mean any

vacant residential or nonresidential property, or any portion thereof,

or any distressed residential property, which, subsequent to conversion

or rehabilitation under this article, will be owned as a cooperative or

a condominium or new residential construction to be owned as a

cooperative or a condominium.

5. "Homesteading project" shall mean any vacant residential or

nonresidential property, or any portion thereof, or any distressed

residential property, or any new residential construction which,

subsequent to construction, conversion or rehabilitation under this

article, will contain less than five dwelling units, have at least one

owner occupant and not be owned as a cooperative or a condominium.

6. "Rental project" shall mean any vacant residential or

nonresidential property, or any portion thereof, or any distressed

residential property, or any new residential construction which,

subsequent to construction, conversion or rehabilitation under this

article, will be owned and operated as rental residential property.

7. "Eligible applicant" shall mean a person of low income, a housing

development fund company incorporated pursuant to article eleven of this

chapter, a not-for-profit corporation or charitable organization which

has as one of its primary purposes the improvement of housing for

persons of low income, a wholly-owned subsidiary of such a corporation

or organization, a partnership at least fifty percent of the controlling

interest of which is held by such a corporation or organization and

which has agreed to limit profits or rate of return of investors in

accordance with a formula established or approved by the corporation or

a private developer which has agreed to limit profits or rate of return

of investors in accordance with a formula established or approved by the

corporation, a city, town or village, or a county, provided, however,

that the county is only acting as an administrator of a program under

which projects are rehabilitated or constructed or nonresidential

properties are converted by other eligible applicants, or a municipal

housing authority created pursuant to the public housing law, provided,

however, that any real property of such housing authority to be

rehabilitated, constructed or converted under this article shall not

have been financed pursuant to the provisions of the public housing law

and shall not have been owned by such authority prior to July first,

nineteen hundred eighty-six and provided further, however, that persons

of low income shall not be direct recipients of payments, grants or

loans from the corporation under this article but may receive such funds

from another eligible applicant.

8. "Conversion" shall mean all work necessary to convert

nonresidential property into a cooperative or condominium, homesteading

or rental rehabilitation project.

9. "Nonresidential property" shall mean any property which is not

residential property and is underutilized.

10. "Persons of low income" shall mean (a) in cities with a population

of one million or more persons, those persons and families whose incomes

do not exceed eighty percent of the median income for the metropolitan

statistical area in which a project is located; provided however that in

the case of an owner occupant of a homesteading project, "persons of low

income" shall also mean those persons and families whose incomes do not

exceed eighty percent of the median income for the state and (b) in the

portion of the state outside cities with a population of one million or

more persons, (i) and within a metropolitan statistical area those

persons and families whose incomes do not exceed ninety percent of the

median income for the metropolitan statistical area in which a project

is located or ninety percent of the median income for the state,

whichever is greater or, (ii) if a project is located outside a

metropolitan statistical area, those persons and families whose incomes

do not exceed ninety percent of the median income for the county in

which a project is located, or ninety percent of the median income for

the state, whichever is greater.

11. " Distressed residential property" shall mean (a) a residential

property which has an occupancy rate by lawful occupants of less than

sixty percent, (b) a portion of a residential property described in

paragraph (a) of this subdivision provided that such portion also has an

occupancy rate by lawful occupants of less than sixty percent, (c) a

residential property which consists of one or two residential units

prior to rehabilitation under this article and which, subsequent to

rehabilitation, will contain at least one additional residential unit,

or (d) a residential property, the rehabilitation of which would

preserve affordable housing currently serving a population whose housing

need would justify its replacement if it ceased to be available.

12. "Project" shall mean a cooperative, condominium, homesteading or

rental project. In cases where any such project consists of less than

the total number of units or the total amount of floor space of a

property, any reference in this article, to a "project", "cooperative

project", "condominium project", "rental project" or "homesteading

project" shall mean that portion of such property which makes up such

project.

13. "Private developer" shall mean a person, firm, partnership or

corporation which is not otherwise included in the definition of

"eligible applicant".

§ 1102 — Cooperative or condominium, homesteading and rental contracts

Cooperative or condominium, homesteading and rental contracts.

1. Within the limit of funds available in the housing trust fund

account, the corporation is hereby authorized to enter into contracts

with eligible applicants for the furnishing by such applicants of

housing for persons of low income. Each such contract shall provide that

eligible applicants rehabilitate or construct one or more projects or

convert one or more nonresidential properties. Such contracts may

provide for payments, grants or loans by the corporation for the

activities to be carried out by the eligible applicant under the

contract. Such contracts shall provide that a private developer make an

equity investment of the greater of (i) two and one-half percent of

project costs or (ii) five percent of project costs less grants which

are to be applied to such costs. The foregoing shall not preclude a

private developer from making a greater equity investment. Any payments,

grants or loans made by the corporation outstanding at the time of

resale shall be subject to repayment in whole or in part upon resale

after termination of the regulatory period and as otherwise provided

therein. Such repayment provisions may survive the end of the regulatory

period. Such contracts may provide that eligible applicants shall either

(a) perform activities specified under the contract themselves or (b)

act as administrators of a program under which projects are

rehabilitated or constructed or nonresidential properties are converted

by other eligible applicants or (c) perform both such functions. In the

case of a municipality acting as an administrator, funds provided to

such municipality hereunder shall not be deemed to be municipal funds.

The corporation shall refer any request for payments, grants or loans

from persons of low income to eligible applicants in the area in which

such persons reside. Loans may be in the form of participation in loans

including but not limited to participation in loans originated or

financed by lending institutions as defined in section forty-two of this

chapter, the state of New York mortgage agency, the New York city

housing development corporation, the New York state housing finance

agency or private or public employee pension funds. Notwithstanding any

other provision of law, payments, grants and loans may be deposited by

the corporation directly with a lending institution at or before the

time of initial loan closing pursuant to an escrow agreement

satisfactory to the corporation. Payments, grants and loans shall be on

such terms and conditions as the corporation, or the eligible applicant

with the approval of the corporation, as the case may be, shall

determine. Payments, grants and loans shall be used to pay for the

actual and necessary cost of acquisition, construction, rehabilitation

or conversion, provided that not more than fifty percent of such

payments, grants and loans received for the rehabilitation, construction

or conversion of a project may be used for the cost of the project's

acquisition and not more than ten percent of such payments, grants and

loans may be used for the rehabilitation, construction or conversion of

community service facilities and, provided further, that payments,

grants or loans shall not be used for (i) the administrative costs of an

eligible applicant except as otherwise authorized by law, (ii) the cost

of the acquisition, construction, conversion or rehabilitation of

residential units which, subsequent to such acquisition, construction,

conversion or rehabilitation, are to be occupied by persons other than

persons of low income, and (iii) the cost of the acquisition,

construction, conversion or rehabilitation of units which, subsequent to

such acquisition, construction, conversion or rehabilitation, are

occupied or to be occupied for other than residential purposes, except

for community service facilities as described above. No such payments,

grants or loans shall exceed a total of two hundred fifty thousand

dollars per dwelling unit, or such amount of additional funds as the

corporation may determine in accordance with this subdivision. Among the

criteria the corporation shall consider in determining whether to

provide additional funds are: average cost of construction in the area,

location of the project and the impact of the additional funding on the

affordability of the project for the occupants of such project. The

length of any loan provided under this article shall not exceed forty

years. No more than fifty percent of the total amount originally

appropriated pursuant to this article in any fiscal year shall be

allocated to projects located within any single municipality. Of the

amount originally appropriated to the corporation in any fiscal year, no

more than thirty-three and one-third percent shall be allocated to

private developers for projects within a city with a population of one

million or more. Of the amount originally appropriated to the

corporation in any fiscal year, no more than thirty-three and one-third

percent shall be allocated to private developers for projects in the

area outside cities with a population of one million or more.

2. The corporation and eligible applicants which act as administrators

of a program under this article shall deposit any recaptured funds or

funds from the repayment of loans and interest received on loans into

the housing trust fund account.

3. The corporation shall not enter into a contract under this article

unless the eligible applicant has submitted an application and such

application contains a plan, acceptable to the corporation, which

provides for each project:

(a) That violations on the project which are classified as hazardous

or immediately hazardous shall be repaired in accordance with state and

local laws and regulations of state and local agencies and the project

shall be brought into compliance with all applicable laws and

regulations.

(b) For the establishment of occupant selection procedures which

provide that any lawful occupants who live in a project prior to

rehabilitation shall not be displaced as a result of such

rehabilitation, other than temporarily, in which case suitable

relocation arrangements shall be provided, and that any additional

occupants who move into a project are persons of low income. Preference

in selection of such additional occupants; (i) shall be given to persons

or families with the lowest incomes possible, given the income

requirements of the project and; (ii) shall also be given to persons or

families whose current housing fails to meet basic standards of health

and safety and who have little prospect of improving the condition of

their housing except by residing in a project receiving payments, grants

or loans under this article.

(c) In the case of a homesteading project that (i) the project may

only be transferred or sold to an eligible applicant; and (ii) the

resale price of the project shall not exceed an amount equal to the sum

of (A) the original equity paid by the owner for the project and

rehabilitation or construction thereof, exclusive of any payments,

grants or loans received pursuant to this article for such purposes, or

from such other sources as determined by the corporation, with interest

thereon at the rate of six percent per annum, (B) the cost of capital

improvements to the project paid by such owner after the completion of

rehabilitation or construction, exclusive of any payments, grants or

loans received pursuant to this article for such purposes, or from such

other sources as determined by the corporation, with interest thereon at

the rate of six percent per annum, (C) the actual amortization paid by

such owner in the reduction of total outstanding principal indebtedness

on all existing and prior mortgages on, or loans for, such project, but

only to the extent that the proceeds of such mortgages or loans were

used by the owner for the project and rehabilitation or construction

thereof or for the cost of capital improvements thereto, with interest

thereon at the rate of six percent per annum, (D) the actual outstanding

principal indebtedness on all existing mortgages on, or loans or other

obligations for, such project which the owner is required to satisfy,

but only to the extent that the proceeds of such mortgages or loans were

used by the owner for the project and rehabilitation or construction

thereof or for the cost of capital improvements thereto, with interest

thereon at the rate of six percent per annum, provided that if the

indebtedness is not paid in full upon the sale of the project, such

owner shall not be credited with the amount of such indebtedness, and

(E) the reasonable costs and expenses incurred in connection with the

sale of such project.

(d) In the case of a cooperative project that (i) the shares

applicable to a cooperative unit shall be transferred or sold only to an

eligible applicant; and (ii) the resale price of shares applicable to a

cooperative unit shall not exceed an amount equal to the sum of (A) the

original equity paid by the tenant shareholder for such shares and for

the rehabilitation or construction of such unit, exclusive of any

payments, grants or loans received pursuant to this article for such

purposes or from such other sources as determined by the corporation,

with interest thereon at the rate of six percent per annum, (B) the cost

of capital improvements to such unit paid by such tenant shareholder

after the completion of rehabilitation or construction, exclusive of any

payments, grants or loans received pursuant to this article for such

purposes or from such other sources as determined by the corporation,

with interest thereon at the rate of six percent per annum, (C) the

pro-rata portion of any capital assessments or capital contributions for

building wide improvements paid by such tenant shareholder, with

interest thereon at the rate of six percent per annum, (D) the pro-rata

portion of actual amortization paid by such tenant shareholder on all

existing and prior mortgages on such project in the reduction of total

outstanding principal indebtedness, with interest thereon at the rate of

six percent per annum, (E) the actual amortization paid by such tenant

shareholder in the reduction of total outstanding principal indebtedness

on all existing and prior loans for such unit, but only to the extent

that the proceeds of such loans were used by the tenant shareholder for

the purchase of such shares or for the cost of the rehabilitation or

construction of, or capital improvements to, such unit, with interest

thereon at the rate of six percent per annum, (F) the actual outstanding

principal indebtedness on all existing loans or other obligations for

such unit which the tenant shareholder is required to satisfy, but only

to the extent that the proceeds of such loans were used by such tenant

shareholder for the purchase of such shares or for the cost of the

rehabilitation or construction of, or capital improvements to, such

unit, provided that if such indebtedness is not paid in full upon the

sale of such tenant's shares such tenant shareholder shall not be

credited with the amount of such indebtedness, and (G) the reasonable

costs and expenses incurred in connection with the sale of such shares.

(e) In the case of a condominium project that (i) a condominium unit

shall be transferred or sold only to an eligible applicant; and (ii) the

resale price of a condominium unit shall not exceed an amount equal to

the sum of (A) the original equity paid by the owner for such unit and

the rehabilitation or construction thereof, exclusive of any payments,

grants or loans received pursuant to this article for such purposes or

from such other sources as determined by the corporation, with interest

thereon at the rate of six percent per annum, (B) the cost of capital

improvements to such unit paid by such owner after the completion of

rehabilitation or construction, exclusive of any payments, grants or

loans received pursuant to this article for such purposes or from such

other sources as determined by the corporation, with interest thereon at

the rate of six percent per annum, (C) the pro-rata portion of any

capital assessments or capital contributions for building wide

improvements paid by such owner to the project, with interest thereon at

the rate of six percent per annum, (D) the actual amortization paid by

such owner on all existing and prior mortgages on, or loans for, such

unit in the reduction of total outstanding principal indebtedness, but

only to the extent that the proceeds of such mortgages or loans were

used by such owner for the unit and the rehabilitation or construction

thereof or for the cost of capital improvements thereto with interest

thereon at the rate of six percent per annum, (E) the actual outstanding

principal indebtedness on all existing mortgages on, and loans or other

obligations for, such unit which the owner is required to satisfy, but

only to the extent that the proceeds of such mortgages or loans were

used by such owner for the unit and the rehabilitation or construction

thereof or for the cost of capital improvements thereto, provided that

if the indebtedness is not paid in full upon the sale of such unit, such

owner shall not be credited with the amount of such indebtedness, and

(F) the reasonable costs and expenses incurred in connection with the

sale of such unit.

(f) In the case of a rental project that (i) the rental project may

only be transferred or sold to an eligible applicant; and (ii) the

resale price of the rental project shall not exceed an amount equal to

the sum of (A) the original equity paid by the owner for the project and

rehabilitation or construction thereof, exclusive of any payments,

grants or loans received pursuant to this article for such purposes or

from such other sources as determined by the corporation, with interest

thereon at the rate of six percent per annum, (B) the cost of capital

improvements to the project paid by the owner after the completion of

rehabilitation or construction, exclusive of any payments, grants or

loans received pursuant to this article for such purposes or from such

other sources as determined by the corporation, with interest thereon at

the rate of six percent per annum, (C) the actual amortization paid by

such owner on all existing and prior mortgages on, or loans for, such

project in the reduction of total outstanding principal indebtedness,

but only to the extent that the proceeds of such mortgages or loans were

used by such owner for the project and rehabilitation thereof or for the

cost of capital improvements thereto, with interest thereon at the rate

of six percent per annum, (D) the actual outstanding principal

indebtedness on all existing mortgages on, or loans or other obligations

for, such project which the owner is required to satisfy, but only to

the extent that the proceeds of such mortgages or loans were used by the

owner for the project and rehabilitation thereof or for the cost of

capital improvements thereto, provided that if the indebtedness is not

paid in full upon the sale of the project, such owner shall not be

credited with the amount of such indebtedness, and (E) the reasonable

costs and expenses incurred in connection with the sale of such project.

(g) In the case of a rental project, that the project shall be

operated initially as a rental property, and when located in the city of

New York shall be subject to the rent stabilization law of nineteen

hundred sixty-nine, and when located in a municipality which has elected

to be covered by the provisions of the emergency tenant protection act

of nineteen seventy-four, be subject to the provisions of such act. Any

subsequent conversion to cooperative or condominium ownership during the

period in which such property remains subject to the provisions of this

article shall only be allowed with the consent of the corporation and if

done pursuant to section three hundred fifty-two-eeee or three hundred

fifty-two-eee of the general business law shall only be allowed pursuant

to a non-eviction plan. The conversion of a rental project to

cooperative or condominium ownership shall make the cooperative or

condominium subject to the provisions of this article for cooperative or

condominium projects for the remaining term which the rental project was

to be subject to the provisions of this article.

(h) To be located in an area which is blighted, deteriorated or

deteriorating, or has a blighting influence on the surrounding area, or

is in danger of becoming a slum or a blighted area because of the

existence of substandard, insanitary, deteriorating or deteriorated

conditions, an aged housing stock, or vacant non-residential property,

or other factors indicating an inability or unwillingness of the private

sector unaided to cause the rehabilitation, construction or conversion

which is contracted for under this article.

3-a. The corporation shall provide the applicant with a list of

conditions that must be met prior to entering into a contract pursuant

to this article. Within fifteen working days of receipt by the

corporation of all documents in satisfaction of the list, the

corporation shall notify the applicant of the sufficiency or

insufficiency of the documents. After satisfaction by the applicant of

all conditions required by the corporation prior to entering into a

contract the corporation shall enter into the contract within forty-five

working days of satisfaction of such conditions.

4. Notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, or local law enacted pursuant thereto, the

rent stabilization law of nineteen hundred sixty-nine, or the emergency

tenant protection act of nineteen seventy-four, the eligible applicant

with the approval of the corporation shall have the power to set the

initial rent level of any rental housing accommodation which is located

in a rental or homesteading project receiving payments, grants or loans

under this article.

5. Any cooperative or condominium or rental project which receives

payments, grants or loans pursuant to this article shall be subject to

its provisions for a period of twenty years following completion of

rehabilitation work, construction or conversion or for the period during

which any loan or indebtedness received under this article remains

outstanding, whichever is greater provided however that all housing

accommodations in rental projects shall continue to be subject to the

rent stabilization law of nineteen hundred sixty-nine or the emergency

tenant protection act of nineteen seventy-four, as provided in paragraph

(g) of subdivision three of this section as the case may be, for the

period specified in this subdivision and thereafter the applicability of

such laws shall terminate as to each accommodation upon the first

vacancy which occurs in each accommodation.

6. Any homesteading project which receives payments, grants or loans

under this article shall be subject to its provisions for a period of

fifteen years following completion of rehabilitation work, construction

or conversion, or for the period during which any loan or indebtedness

received under this article remains outstanding, whichever is greater.

6-a. Notwithstanding any provisions of subdivisions five and six of

this section to the contrary, in the case of projects subject to a

mortgage made by any lender:

(a) such lender, if not the corporation, shall give the corporation

notice when an owner has defaulted on any payment of principal or

interest on such mortgage loan for a project for a consecutive period of

sixty days.

(b) following receipt of such notice, or at such earlier time as the

corporation deems appropriate, the corporation shall seek to cure such

default and make the project economically viable by assisting the owner

in entering into a mortgage modification agreement with the lender,

finding a new eligible applicant to own the project and assume the

obligations under the mortgage or taking such other actions, consistent

with the provisions of this article, as the corporation deems

appropriate.

(c) notwithstanding the provisions of paragraphs (a) and (b) of this

subdivision, with respect to any lender other than the corporation, the

corporation may provide in agreements respecting any project that where

a lender shall have foreclosed or obtained title to a project in

accordance with law and the provisions of its mortgage, the project or

particular residential units therein shall not be subject to one or more

provisions of this article, other than the rent stabilization coverage

provisions of paragraph (g) of subdivision three of this section. Any

agreement pursuant to this paragraph shall only be made upon a finding

by the corporation that such agreement is necessary in order to enable a

project owner to obtain a mortgage loan from a lender other than the

corporation.

7. The corporation shall provide for the review, at periodic intervals

at least annually, of the performance of eligible applicants under

contract pursuant to this article. Such review shall, among other

things, be for the purposes of ascertaining conformity to contractual

provisions, the financial integrity and efficiency of eligible

applicants and the evaluation of the project. Contracts entered into

pursuant to this article may be terminated, funds may be withheld and

unspent funds may be recaptured by the corporation upon a finding of

substantial nonperformance or breach by the eligible applicant of its

obligations under its contract.

8. Within each of the three categories of projects (cooperative or

condominium, rental, or homesteading), preference in the awarding of

contracts shall be given to economically feasible projects which contain

a substantial number of persons of low income whose income does not

exceed fifty percent of the median income for the metropolitan

statistical area in which the project is located, or if the project is

located outside such an area, to projects which contain a substantial

number of persons of low income whose incomes do not exceed fifty

percent of the median income for the county in which the project is

located, additional preference shall be given to economically feasible

projects located on a brownfield site that has received a certificate of

completion.

§ 1103 — General and administrative provisions

General and administrative provisions. 1. The corporation

shall issue and promulgate rules and regulations for the administration

of this article. The rules and regulations shall include provisions

concerning the eligibility of applicants for payments, grants and loans

under this article; funding criteria and the funding determination

process; supervision and evaluation of contracting applicants;

reporting, budgeting and record-keeping requirements; provisions for

modification and termination of contracts; and such other matters not

inconsistent with the purposes and provisions of this article as the

corporation shall deem necessary or appropriate.

2. The corporation may provide technical services and assistance or

contract to provide technical services and assistance to eligible

applicants to comply with the provisions and intent of this article

which services and assistance may include but shall not necessarily be

limited to rehabilitation skills training, site selection, financial

packaging and engineering and architectural services necessary for the

preparation of proposals for entering into contracts or for the

continued operation of cooperative or condominium, homesteading or

rental rehabilitation projects.

3. The corporation shall, on or before September fifteenth in each

year, submit a proposed budget for the operation of the corporation for

its next fiscal year to the director of the budget for his review. The

chairman of the corporation shall also deliver a copy of such budget to

the chairman of the senate finance committee and the chairman of the

assembly ways and means committee at the same time that the budget is

delivered to the director of the budget. The budget shall include the

total amount needed for corporate purposes, including the funds required

by the corporation for its general and administrative expenses, the

source of all funds that the corporation expects to receive and such

other information as the director of the budget shall require.

4. The corporation shall require the submission of the names,

addresses and business background of the principals involved, the nature

of their fiduciary relationship and their financial relationship, past,

present and future, to the project and to each other.

ARTICLE 18-A Low Income Turnkey/enhanced Housing Trust Fund Program

§ 1106 — Legislative findings and declarations

Legislative findings and declarations. The legislature hereby

finds and declares that there is a serious shortage of decent affordable

housing in the state for persons of low income; that the cost of

providing such housing without public participation and assistance is

prohibitively high; that programs operated by municipal housing

authorities and municipalities have for decades provided hundreds of

thousands of low income New Yorkers with decent, safe and affordable

housing; that due to the lack of funds available for leveraging state

dollars for low income housing, and the delay that occurs when a variety

of funding sources are used to produce such housing, a need exists for

the state to fully finance debt free low income housing. The

legislature therefore finds that a program should be established

pursuant to which the housing trust fund corporation shall provide

grants or loans to municipal housing authorities, municipalities and

not-for-profit organizations or charitable organizations, housing

development fund companies, or private developers which shall be used to

pay for all or a portion of the project costs of constructing or

rehabilitating turnkey/enhanced rental projects, and that such projects

shall thereafter be owned by eligible owners for the benefit of persons

of low income. The legislature intends that grants or loans provided to

municipal housing authorities, or municipalities through the low income

turnkey/enhanced housing trust fund program shall not substitute for

funds which such authorities or municipalities would have spent in the

absence of such program, and that authorities and municipalities shall

use such grants or loans to increase the supply of low income housing to

levels greater than would have been possible without such program.

§ 1106-a — Definitions

Definitions. For purposes of this article, the following

terms shall have the following meanings:

1. "Corporation" means the housing trust fund corporation established

by section forty-five-a of this chapter.

2. "Turnkey/enhanced rental project" or "project" means a vacant

property which is converted or rehabilitated to residential rental use,

a newly constructed rental project or projects or a state-aided public

housing project or projects where more than thirty percent of the units

are vacant.

3. "Turnkey/enhanced rental project costs" means the reasonable and

necessary costs for planning, financing, acquisition of land or

buildings and construction of new buildings or the reconstruction,

rehabilitation, repair or remodeling of existing buildings, provided

however that not more than twenty percent of such costs may be used for

acquisition of land or buildings. Such costs may also include all or any

portion of the cost necessary for the creation of a reserve fund

required pursuant to section eleven hundred six-e of this article, and

all or a portion of a working capital fund. Such costs shall not include

the costs of nondwelling-related facilities, eligible applicant

administrative costs or, in cities with a population of one million or

more, the cost of demolition or acquisition of land or buildings.

4. "Eligible applicant" means a housing development fund company

incorporated pursuant to article eleven of this chapter, a

not-for-profit corporation or charitable organization which has as one

of its primary purposes the improvement of housing for persons of low

income, a wholly owned subsidiary of such a corporation or organization,

a municipality, a municipal housing authority created pursuant to the

public housing law or a person, firm, partnership or corporation which

has agreed to limit profits or rate of return of investors in accordance

with a formula established by the corporation. In the case of an

application by a city with a population of one million or more for

funding pursuant to this article for projects expected to contain thirty

percent or more permanent housing units occupied by eligible homeless

families, as defined in article three-A of this chapter, such city shall

be an eligible applicant only if the corporation shall determine in its

sole discretion that funding for the purpose of undertaking the project

is unavailable for the project pursuant to article three-A of this

chapter.

5. "Eligible owner" means a housing development fund company

incorporated pursuant to article eleven of this chapter, a

not-for-profit corporation or charitable organization which has as one

of its primary purposes the improvement of housing for persons of low

income, a wholly owned subsidiary of such a corporation or organization,

a partnership at least fifty percent of the controlling interest of

which is held by such a corporation or organization and which has agreed

to limit profits or rate of return of investors in accordance with a

formula established or approved by the corporation, a municipality or a

municipal housing authority created pursuant to the public housing law.

6. "Reserve fund" means a fund or funds to be used in accordance with

guidelines established by the corporation for ongoing operation and

maintenance costs and replacement costs and may only be used after the

first year of a project's operation, as measured from the date of

substantial occupancy, except in the event of an imminent threat to the

health and safety of the tenants. Such fund shall be deposited in a

banking institution whose principal place of business is located within

the state of New York and which has a proven record of investment in the

community in which the project is located.

7. "Working capital fund" shall mean a fund to be used for start-up

expenses including, but not limited to, liability insurance, fidelity

bond premiums, utility hook-up deposits, maintenance equipment, movable

furnishings and equipment and other initial project related expenses, as

approved by the corporation.

§ 1106-b — Low income turnkey/enhanced housing trust fund program established

Low income turnkey/enhanced housing trust fund program

established. There is hereby established within the housing trust fund

corporation a low income turnkey/enhanced housing trust fund program.

Within the limit of funds available for this purpose in the

turnkey/enhanced housing account, the corporation is hereby authorized

to enter into contracts to provide grants or loans to eligible

applicants for all or a portion of turnkey/enhanced rental project costs

to construct or rehabilitate turnkey/enhanced rental projects subject to

the terms and conditions of this article. Upon completion of

construction or rehabilitation of a turnkey/enhanced rental project, an

eligible applicant may, where appropriate, transfer such project to an

eligible owner.

§ 1106-c — Request for proposals

Request for proposals. The corporation, pursuant to a

request for proposals, shall not provide grants or loans under this

article except to an eligible applicant which has submitted an

application in consultation with the eligible owner or owners, which

contains:

1. a development timetable acceptable to the corporation that shall

include the projected time schedule for (a) commencement and completion

of regulatory and review processes and approvals including procedures

for land use and disposition; (b) construction loan closing; and (c)

commencement and completion of construction. Such timetable shall also

include a projected date as to when the units will be available for

occupancy and when such units will be fully occupied and any other

information the corporation deems appropriate;

2. a proposed operating and maintenance budget;

3. an estimate of the total project costs which shall include (a) the

costs necessary for construction or rehabilitation which shall not

exceed a ceiling amount established by the corporation which is

consistent with the reasonable costs of constructing or rehabilitating

projects in the municipality in which the project shall be located, (b)

the costs necessary for working capital and a reserve fund and (c) such

other reasonable costs necessary for the completion of such project;

4. evidence that the municipality within which the turnkey/enhanced

rental project will be located is experiencing a shortage of affordable

housing for persons of low income and the proposed turnkey/enhanced

rental project will contribute to reducing such shortage;

5. the names, addresses and business background of the principals

involved, the nature of their fiduciary relationship and their financial

relationship, past, present and future, to the project and to each

other;

6. the identity of the eligible owner if the eligible owner is not the

eligible applicant; and

7. such other information as the corporation may require.

§ 1106-d — Selection of eligible applicants for grants or loans under this article

Selection of eligible applicants for grants or loans under

this article. 1. Prior to providing grants or loans to an eligible

applicant pursuant to this article, the corporation shall determine

that:

(a) eligible applicants can demonstrate by their past performance or

other objective factors, that they are able to complete a

turnkey/enhanced rental project in a timely, efficient and cost

effective manner;

(b) the turnkey/enhanced rental project will be managed by an eligible

owner or other entity who can demonstrate by its past performance or

other objective factors that it is capable of effectively managing such

a project for the benefit of persons of low income; and

(c) the eligible applicant shall not borrow any funds for the project

without the prior approval of the corporation.

2. In selecting eligible applicants who will obtain grants or loans

pursuant to this article, the corporation shall give preference to

proposals for turnkey/enhanced rental projects which:

(a) will be located in an area which is experiencing a severe shortage

of affordable housing for persons of low income;

(b) will be located in a municipality which will utilize steps to

simplify or expedite processing, where applicable;

(c) will result in the greatest number of quality units and the lowest

costs per unit; and

(d) will rehabilitate or construct small scale, low rise buildings.

§ 1106-e — Reserve fund

Reserve fund. There shall be a reserve fund for each project

which in no event shall initially be less than five percent of the

turnkey/enhanced rental project costs, exclusive of any reserve fund.

Such reserve fund may be provided by the corporation or any other source

and, if provided by another source, shall be provided in cash or the

payment of such cash shall be assured by deposit of adequate marketable

collateral prior to the payment by the corporation of any project costs,

excluding advances for planning costs.

§ 1106-f — Project operation and management; rent structure; tenant selection

Project operation and management; rent structure; tenant

selection. The eligible owner shall enter into an agreement with the

corporation which provides that the eligible owner of such project

shall:

1. operate and manage such project as a rental building which is used

for other than transient occupancy;

2. structure rent levels in such project to be: (a) affordable to the

tenants as specified in subdivision four of this section to the extent

economically feasible and (b) when added to any other sources of funds

available for the project's operation not in excess of the costs of

operating and maintaining the project including a reserve fund;

3. not borrow any funds for the project without the prior approval of

the corporation;

4. to the extent economically feasible, select tenants who move into

such project and maintain a mix of tenants so that (a) at least thirty

percent and no more than seventy percent of such tenants are receiving

benefits pursuant to section one hundred thirty-one-a of the social

services law or could only afford rents no greater than those paid by

persons receiving benefits pursuant to such section, provided, however,

that of such tenants preference shall be given to persons who have been

referred from hotels, motels or shelters operated by a social services

district or receiving payment directly or indirectly from such district,

or any other philanthropic or charitable facility providing such

accommodations; and (b) the remaining tenants have incomes which do not

exceed eighty percent of the median income for the metropolitan

statistical area in which such project is located or if a project is

located outside such area, those persons or families whose incomes do

not exceed eighty percent of the median income for the county in which a

project is located; and

5. provide such other information as may be necessary to carry out the

provisions of this article.

§ 1106-g — Adjustment of rents; income verification

Adjustment of rents; income verification. Notwithstanding

any other provision of law, no grants or loans shall be provided

pursuant to this article unless an eligible owner has agreed to require

the tenants and occupants residing in the housing project or projects to

submit an annual income affidavit as prescribed by the corporation,

together with proper documentation as and if prescribed by the

corporation, as the case may be. Upon submission of such affidavit and

documentation, if any, the eligible owner shall adjust the rent of a

tenant pursuant to a procedure established by the corporation by

regulation which procedure shall, to the extent economically feasible,

maintain the affordability of such project to such tenants. If the

tenant or occupant shall fail to submit such affidavit and

documentation, or if such verification as prescribed by the corporation

shall result in a disagreement caused by understatement of income and

the tenant shall have failed to correct such original affidavit and

documentation on forms specified by the corporation within sixty days of

notification by certified mail by the eligible owner addressed to the

tenant, the eligible owner shall in addition to the last rent assess

such tenant or occupant a surcharge which shall equal the difference

between the tenant's last rent and the rent the tenant would otherwise

have to pay had the grant or loan provided under this article been made

as a loan at the prevailing market rate of interest and requiring thirty

year amortization at the time the grant or loan was made. The provisions

of any other law to the contrary notwithstanding, solely for the purpose

of verification of income, the corporation may contract with the

department of taxation and finance for services performed by such

department in verifying income information forwarded by the corporation

or the eligible owner to such department. Nothing contained herein shall

be construed to authorize the corporation to contract with such

department to provide any income information whatsoever and such

agreement shall be limited solely to the verification of income

information. No officer or employee of the corporation, the New York

state housing finance agency, the division of housing and community

renewal or the eligible owner shall be subject to any civil or criminal

liability by reason of his forwarding to the department of taxation and

finance of any income information pursuant to this section, unless (i)

such information is knowingly and willfully materially misrepresented by

such officer or employee or (ii) such information is knowingly and

willfully divulged to any person, except in the discharge of such

officer's or employee's duties solely for the purpose of verification of

income, for any reason whatsoever. The corporation shall promulgate

rules and regulations to effect the provisions of this section provided

however that the corporation need not promulgate rules and regulations

in the event the corporation adopts procedures which are substantially

similar to the rules and regulations adopted by the commissioner

pursuant to section sixty of this chapter. The provisions of the state

freedom of information act shall not apply to any income information

obtained by an eligible owner, division of housing and community

renewal, New York state housing finance agency or the corporation,

pursuant to the provisions of this section.

§ 1106-h — Real property tax exemption

Real property tax exemption. 1. The local legislative body

of any city, town or village is hereby authorized and empowered to adopt

and amend a local law to provide that all or any portion of the value of

the property included in a turnkey/enhanced rental project which

represents an increase over the assessed valuation of the real property,

both land and improvements, prior to the improvements of the property

necessary or intended to effectuate the purposes of this article, may be

exempt from any and all city, village and town real property taxes, as

defined in subdivision twenty of section one hundred two of the real

property tax law, real property special ad valorem levies, as defined in

subdivision fourteen of section one hundred two of the real property tax

law, and special assessments, as defined in subdivision fifteen of

section one hundred two of the real property tax law, except that the

assessed valuation may be increased or decreased to reflect a change in

the level of assessment as certified pursuant to title two of article

twelve of the real property tax law.

2. In any assessing unit in which there has been a change in level of

assessment as provided in title two of article twelve of the real

property tax law, the commissioner of taxation and finance shall certify

the change in level of assessment factor in the manner provided in title

two of article twelve of the real property tax law. The term "assessing

unit" as used in this subdivision means a city, town, village or county

having a county department of assessment with the power to assess real

property.

3. Such local law may also provide for the abatement of any or all of

the property taxes which are payable to such city, town or village from

such project, for such duration as is provided in such local law, if any

property taxes remain to be paid after the exemption or abatement

provided in this section is determined.

4. Provided that the tax exemption or abatement authorized by this

section shall be in addition to any other tax exemption or abatement

authorized by law, and provided further, however, that in the event a

project ceases to be subject to one or more provisions of this article

any tax exemption or abatement authorized pursuant to this section with

respect to the eligible property of such project shall terminate.

§ 1106-i — General and administrative provisions of this article

General and administrative provisions of this article. 1.

The corporation shall provide for the review, at periodic intervals at

least annually, of the performance of eligible applicants to the extent

applicable and eligible owners under contract pursuant to this article.

Such review shall, among other things, be for the purposes of

ascertaining conformity to contractual provisions and the financial

condition of the project.

2. The provisions of section eleven hundred three of this chapter

shall apply to this article.

3. Paragraph f of subdivision three of section eleven hundred two of

this chapter shall apply to this article. For the purposes of said

paragraph a turnkey/enhanced rental project shall be deemed to be a

rental project.

4. The corporation shall deposit any recaptured funds or funds from

the repayment of loans and interest received on loans into the

turnkey/enhanced housing account.

5. Notwithstanding any other provision of law, payments, grants and

loans may be deposited by the corporation directly with a lending

institution at or before the time of initial loan closing pursuant to an

escrow agreement satisfactory to the corporation.

6. In addition to the information contained in the report required

pursuant to section twenty of the public housing law, the corporation

shall, on or before October first in each year, submit a report to the

governor, the temporary president of the senate, the speaker of the

assembly and the minority leader of the senate and the minority leader

of the assembly which shall include (i) the name of the eligible owner

of the turnkey/enhanced housing trust fund project if such owner is not

also the eligible applicant; (ii) the actual development schedule to

date for each project; and (iii) a list of the number of units per

project that upon initial occupancy were occupied by homeless families

who previously resided in hotels, motels or shelters that are regulated

under title eighteen of the official compilation of codes, rules and

regulations of the state of New York, and a list of names and locations

of such hotels, motels or shelters.

§ 1106-j — Liability on obligations

Liability on obligations. 1. Except for obligations which

the corporation assumes by contract for the construction, rehabilitation

and development period of any project, neither the corporation, the New

York state housing finance agency nor the state shall have any

responsibility or liability as to construction, rehabilation, operation,

maintenance, repair or use of projects unless otherwise specifically

provided by law.

2. Any contract entered into pursuant to this section between the

corporation and an eligible applicant, or eligible owner of a project

shall cite and set forth subdivision one of this section.

ARTICLE 19 Affordable Home Ownership Development Program

§ 1110 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that home ownership by persons of low and

moderate income has long been, and still is, an essential element of the

state's social economy, resulting in the development, stabilization and

preservation of neighborhoods and communities. The legislature further

finds that persons of low and moderate income require assistance to

enable them to supplement their own resources and the ability of the

private sector to make the availability of private home ownership a

reality. By providing home ownership assistance the state may narrow the

gap between the resources of the individual and the high cost of home

ownership and by requiring leveraging may cause investment of other

public and private funds. The appeal of private home ownership has been

demonstrated to be a strong incentive to families to move into areas

which otherwise may be in danger of becoming blighted through neglect

and the lack of investment. Pride in ownership will halt deterioration

and offer the prospect of turnaround. The legislature further finds that

adequate private resources are often not available to persons with

modest incomes to acquire, rehabilitate or construct their homes and

that the preservation of and development of existing private homes can

often prevent an area from becoming a slum or a blighted area. In

addition, stimulation of the level of activity in construction of new

affordable homes will provide needed jobs and stability for communities.

The legislature therefore finds that a program should be established to

provide monies to make the construction, rehabilitation and improvement

of homes for low and moderate income persons more affordable. It is

intended that any monies provided to municipalities through this program

not substitute for monies which such municipalities would have spent in

the absence of this program and that such monies will enable such

municipalities to expand their commitment to increase the supply and

condition of low and moderate income owner occupied housing to levels

greater than would have been possible without this program.

§ 1111 — Definitions

Definitions. 1. "Home" shall mean a one to four family

dwelling which has at least one owner occupant or an owner occupied unit

in a cooperative or a condominium.

2. "Eligible applicant" shall mean a city, a town, a village, a

housing development fund company incorporated pursuant to article eleven

of this chapter, any not-for-profit corporation or charitable

organization which has as one of its primary purposes the improvement of

housing or a municipal housing authority created pursuant to the public

housing law, or a public benefit corporation formed to assist particular

municipalities with their housing, community development or renewal

needs, or a county, provided, however, that the county acts as an

administrator of a program under which projects are constructed,

rehabilitated or improved by other eligible applicants or acts in any

other capacity as permitted by law.

3. "Grantee" shall mean an eligible applicant which operates a program

of financial assistance pursuant to this article.

4. "Owner" shall mean an individual who owns or agrees to purchase a

home assisted under this program and to occupy it as his principal place

of residence or a partnership, corporation or other entity which will

build or rehabilitate vacant properties for sale to home buyers.

5. "Home buyers" shall mean individuals or households for whom there

are no other reasonable and affordable homeownership, rehabilitation or

home improvement alternatives, as the case may be, in the private

market, as determined by the grantee and who shall occupy a home

assisted under this article as their principal place of residence.

6. "Rehabilitation" or "home improvement" shall mean all work

necessary to bring a structure into compliance with all applicable laws

and regulations including but not limited to the installation,

replacement or repair of heating, plumbing, electrical and related

systems and the elimination of all hazardous and immediately hazardous

violations in the structure in accordance with state and local laws and

regulations of state and local agencies. Rehabilitation or home

improvement may also include reconstruction or work to improve the

habitability or prolong the useful life of residential property.

7. "Corporation" shall mean the affordable housing corporation created

by section forty-five-b of this chapter.

8. "Affordable home ownership development programs" or "Project" shall

mean the rehabilitation, improvement, construction or acquisition,

singly or in combination, of one or more homes.

§ 1112 — Affordable home ownership development contracts

Affordable home ownership development contracts. 1. Within

the limit of funds available in the affordable housing development

account, the corporation is hereby authorized to enter into contracts

with eligible applicants to provide grants which such applicants shall

use to finance affordable home ownership development programs subject to

the terms and conditions of this article. Any grants received by a

municipality hereunder shall not be deemed to be municipal funds.

Grantees shall utilize funds provided pursuant to this article solely as

payments, grants and loans to owners to reduce the costs of new

construction, rehabilitation or home improvement or the cost of

acquisition, but only where such acquisition is part of an affordable

home ownership development program or project to construct or

rehabilitate homes, or as otherwise authorized by law. Such financial

assistance may be in the form of loans, participation in loans including

but not limited to participation in loans originated or financed by

lending institutions as defined in section forty-two of this chapter,

private or public employee pension funds or the state of New York

mortgage agency, or grants, on such terms and conditions as the grantee

with the approval of the corporation shall determine, provided that no

such payments, grants and loans shall exceed the lesser of (i) sixty

percent of the project cost for projects involving acquisition or one

hundred percent of rehabilitation programs without an acquisition

component or (ii) the following per dwelling unit limitations (A) fifty

thousand dollars for projects except as provided in subparagraph (B) of

this paragraph or (B) up to seventy-five thousand dollars for a high

cost project or a project which will receive a loan from the federal

farmers home administration. Up to ten percent of the program or project

cost may be used for grantee operating expenses including expenses

related to the organization operating support and administration of the

contract. Among the criteria the corporation shall consider in

determining whether a project is a high cost project are: average cost

of construction in the area, location of the project, and the impact of

the additional funding on the affordability of the project for the

occupants of such project. No more than fifty percent of the total

amount appropriated pursuant to this article in any fiscal year shall be

allocated to homes located within any single municipality.

2. The corporation shall not enter into a contract under this article

except with an eligible applicant which has submitted an application

pursuant to a request for proposals issued by the corporation which

application contains a plan acceptable to the corporation which provides

that:

(a) The proposed project or program will make home ownership,

rehabilitation or home improvement affordable to persons who cannot

afford to own, rehabilitate or improve homes by relying upon the

ordinary unaided operation of private enterprise.

(b) There shall be criteria, satisfactory to the corporation, which

provide for maximum income limitations or a system of income targeting

designed to ensure that home buyers who benefit from financial

assistance provided pursuant to this article would be unable to acquire,

rehabilitate or improve homes by relying upon the ordinary unaided

operation of private enterprise.

(c) The payments, grants and loans provided by grantees pursuant to

this article will be supplemented by private or other public investment

and the payments, grants and loans provided by the grantee are the least

necessary to make home ownership, rehabilitation or home improvement

affordable to the income group to be served by the proposed project or

program.

(d) The proposed project or projects, if not built or rehabilitated by

a not-for-profit corporation, will be built or rehabilitated by a

private developer/builder who has agreed to limit his profit in

accordance with a formula, satisfactory to the corporation, which has

been established by the grantee.

(e) The proposed project or program will provide assistance in an area

which is blighted, deteriorated or deteriorating, or has a blighting

influence on the surrounding area, or is in danger of becoming a slum or

a blighted area because of the existence of substandard, insanitary,

deteriorating or deteriorated conditions, an aged housing stock, or

vacant non-residential property, or other factors indicating an

inability or unwillingness of the private sector unaided to cause the

construction, rehabilitation or home improvement for which payments,

grants and loans under this article is provided.

(f) Home buyers will occupy homes as their principal place of

residence and funds provided for the benefit of the home buyer will be

recaptured by the grantee if the home buyer does not occupy the home as

the home buyer's principal place of residence under the terms and

conditions of a formula established or approved by the corporation.

(g) In the case of a rehabilitation or home improvement program, the

majority of payments, grants and loans provided for each home shall be

used to perform work which prolongs the useful life of the home or shall

be used to correct basic structural defects or to repair basic building

systems which threaten or if not corrected or repaired could threaten

the health and safety of the dwelling's residents.

(h) The corporation shall provide the applicant with a list of

conditions that must be met prior to entering into a contract pursuant

to this article. Within fifteen working days of receipt by the

corporation of all documents in satisfaction of the list, the

corporation shall notify the applicant of the sufficiency or

insufficiency of the documents. After satisfaction by the applicant of

all conditions required by the corporation prior to entering into a

contract the corporation shall enter into the contract within forty-five

working days of satisfaction of such conditions.

(i) Eligible applicants receiving awards pursuant to this article for

homes located in cities with a population of one hundred thousand or

more shall provide preference to homebuyers who are members of a police

force of such city, provided that such city has adopted a local law

authorizing such preference.

(j) In the case of projects that receive an award of over forty

thousand dollars, the grantee may establish resale restrictions

requiring the sale of the unit or units receiving such funding through a

grant from the corporation be purchased only by qualified low-income

homebuyers extending for a period of at least sixty years, but no more

than ninety-nine years, and the grantee may ensure this resale

restriction by use of deed restrictions, community land trusts, or

limited-equity cooperative ownership structure.

3. In determining awards pursuant to this article the corporation

shall give preference to applications based upon the extent to which the

proposed program or project will:

(a) Serve the lowest income households in the applicable region and is

designed to continue to be affordable to such households for a

substantial period of time.

(b) Leverage private and other public investment so as to reduce the

amount of assistance provided pursuant to this article which is

necessary to operate or establish the program or project.

(c) Contribute to the development of the neighborhood or community in

which the program or project is located.

(d) Not directly displace current low and moderate income residents of

such neighborhood or community.

(e) Be undertaken and completed in a timely fashion.

(f) Utilize innovative, cost effective design techniques and building

materials, which reduce construction, rehabilitation or operating costs

including, but not limited to factory built or modular homes.

(g) Be located on a brownfield site that has received a certificate of

completion.

3-a. In determining awards pursuant to this article, the corporation

shall establish tiered project funding levels based on length and depth

of affordability.

4. The corporation shall not provide a grant to an eligible applicant

pursuant to this article unless the corporation determines that there is

a strong probability that the private investment in the applicant's

proposed program would not be made without the grant and that the grant

will not substitute for private funds which would be otherwise available

to the program.

5. The corporation shall provide for the review, at periodic intervals

not less than annually, of the performance of grantees receiving

financial assistance pursuant to this article. Such review shall, among

other things, be for the purposes of ascertaining conformity to

contractual provisions, the financial integrity and efficiency of

grantees and the evaluation of the grantees' activities. Contracts

entered into pursuant to this article may be terminated, funds may be

withheld and unspent funds recaptured by the corporation upon a finding

of substantial nonperformance or breach by the grantee of its

obligations under its contract.

§ 1113 — General and administrative provisions

General and administrative provisions. 1. The corporation

shall issue and promulgate rules and regulations for the administration

of this article. The rules and regulations shall include provisions

concerning eligibility of grantees for state financial assistance;

funding criteria and the funding determination process; supervision and

evaluation of the contracting grantees; reporting, budgeting and

recordkeeping requirements; provisions for modification, termination,

extension and renewal of contracts; and such other matters not

inconsistent with the purposes and provisions of this article as the

corporation shall deem necessary, proper or appropriate. Grantees shall

deposit any funds received from the repayment of loans or interest

received on loans into the affordable home ownership development

account. The corporation may provide technical services and assistance

or contract to provide technical services and assistance to grantees to

comply with the provisions and intent of this article which services and

assistance may include but shall not necessarily be limited to

construction skills training, site selection, financial packaging and

engineering and architectural services necessary for the preparation of

proposals for entering into contracts or for the continued operation of

projects.

2. (a) The corporation shall provide the commissioner of housing and

community renewal, on a timely basis, with the data and other

information necessary to compile the report or reports required pursuant

to section twenty of the public housing law.

(b) The corporation shall, on or before September fifteenth in each

year, submit a proposed budget for the operation of the corporation for

its next fiscal year to the director of the budget for his review. The

chairman of the corporation shall also deliver a copy of such budget to

the chairman of the senate finance committee and the chairman of the

assembly ways and means committee at the same time that the budget is

delivered to the director of the budget. The budget shall include the

total amount needed for corporate purposes, including the funds required

by the corporation for its general and administrative expenses, the

source of all funds that the corporation expects to receive and such

other information as the director of the budget shall require.

3. The corporation shall require the submission of the names,

addresses and business background of the principals involved, the nature

of their fiduciary relationship and their financial relationship, past,

present and future, to the project and to each other.

ARTICLE 20 Manufactured Home Cooperative Fund Program

§ 1120 — Statement of legislative intent

Statement of legislative intent. The legislature hereby finds

and declares that the shortage of decent affordable housing for persons

of low and moderate income remains significant and must be addressed in

new and innovative ways; that a particular housing problem exists for

homeowners residing in manufactured home parks, wherein there is the

potential for serious dislocation of families and loss of equity through

the sale of manufactured home parks to interests not conducive to

continuation of park settings for these manufactured homes; that

manufactured home park residents frequently lack the resources to

purchase new homes or move existing homes; that an innovative and cost

effective solution to the problem of dislocation of manufactured home

park families is the formation of park cooperatives in which the

manufactured home park is owned cooperatively by the manufactured home

owners who reside therein; that a significant public purpose may be

served by assisting these homeowners in the formation of manufactured

home park cooperatives, such purpose being a reduction in the cost of

safe and sanitary housing for persons of low and moderate income; that

manufactured home park cooperatives should be assisted through public

support for infrastructure improvements; that it is the policy of the

state to create such housing cooperative opportunities and to provide

for the aid, care, and support of the needy in a manner that encourages

self-sufficiency and self-determination. The legislature therefore finds

that a program should be established to provide monies for land

acquisition by manufactured home park cooperatives and for improvements

to the infrastructures of such manufactured home parks.

§ 1121 — Definitions

Definitions. For the purposes of this article:

1. "Agency" shall mean the New York state housing finance agency

created by section forty-three of this chapter.

2. "Cooperative project" or "project" shall mean any manufactured home

park property which, subsequent to receiving assistance under this

article, will be owned as a cooperative by the owners of the

manufactured homes situated therein.

3. "Eligible applicant" shall mean a manufactured home residents'

association representing a majority of the manufactured home residents,

a manufactured home park cooperative, a municipality, a housing

development fund company incorporated pursuant to article eleven of this

chapter, or any not-for-profit corporation or charitable organization

which has as one of its primary purposes the improvement of housing.

4. "Infrastructure improvement" shall mean the construction,

reconstruction, improvement, reconditioning, and preservation, including

the acquisition of real property and interests therein required or

expected to be required in connection therewith, of roads, bridges,

sewage and water collection and disposal systems, lighting districts,

sidewalks, and other capital projects which will benefit the cooperative

as a whole.

5. "Manufactured home park" shall mean a manufactured home park as

defined in section two hundred thirty-three of the real property law.

6. "Manufactured home park cooperative" shall mean a corporation or

other entity formed for the purpose of owning a manufactured home park

wherein the ownership of such shares, membership interest or certificate

of membership will entitle the owners or holders thereof to occupancy in

such park pursuant to section three hundred fifty-two-e of the general

business law.

§ 1122 — Manufactured home cooperative fund contracts

Manufactured home cooperative fund contracts. 1. Within the

limit of funds available in the manufactured home cooperative fund, the

agency is hereby authorized to enter into contracts with eligible

applicants to provide loans which such eligible applicants shall use to

establish manufactured home park cooperatives through acquisition or

infrastructure improvement or both.

2. No such loan may be made or its term extended pursuant to this

article, unless the agency determines that the eligible applicants

cannot afford or obtain the financing necessary to accomplish the

purposes of such loans through the ordinary unaided operation of private

enterprise.

3. The agency shall not enter into loans under this article except

with an eligible applicant which has submitted a plan acceptable to the

agency which provides that subsequent to conversion to cooperative

ownership, a majority of the manufactured home owners or one or more

members of their immediate family intend to occupy their manufactured

homes as their primary residence.

4. Such contracts may provide for loans by the agency for the

activities to be carried out by the eligible applicant under the

contract, including participation in loans including but not limited to

participation in loans originated or financed by lending institutions as

defined in section forty-two of this chapter, private or public employee

pension funds or the state of New York mortgage agency. Loans shall be

at the prevailing interest rate in the area for long term residential

mortgages or at such lower rate as the agency determines to be necessary

for the project to be financially feasible. Loans shall not exceed

ninety-five percent of the project costs including purchase price and

costs for infrastructure improvement. The term of the loan for a

cooperative project or infrastructure improvement shall not exceed ten

years unless extended for periods not to exceed ten years in which case

the term of the loan as extended shall not exceed thirty years in the

aggregate and the amortization schedule for the loan shall not exceed

thirty years.

5. In determining loans pursuant to this article the agency shall give

preference to applications based upon the following criteria:

(a) the extent to which park residents are threatened with

displacement by the projected sale or closing of the existing park;

(b) the scarcity of affordable alternate sites in the immediate area

for relocation of park residents;

(c) the extent to which manufactured home parks, subsequent to

receiving assistance under this article, will be owned as a cooperative

by shareholders or owners or holders of membership interests or

certificate of membership in such cooperative whose average incomes do

not exceed (i) the greater of one hundred percent of the median income

for the metropolitan statistical area in which a project is located or

one hundred percent of the median income for the state, or (ii) if the

project is located outside such an area, the greater of one hundred

percent of the median income for the county in which the project is

located or one hundred percent of the median income for the state;

(d) the extent to which the proposed resident ownership structure

provides long-term security and tenure;

(e) the extent to which the proposed project will be undertaken and

completed in a timely fashion; and

(f) the extent to which the homes in a park are occupied by the

manufactured home owners or members of their families.

6. The agency shall provide for the review, at periodic intervals not

less than annually, of the performance of applicants receiving financial

assistance pursuant to this article. Such review shall, among other

things, be for the purposes of ascertaining conformity to contractual

provisions, the financial integrity and efficiency of applicants and the

evaluation of the applicants' activities. Contracts entered into

pursuant to this article may be terminated, funds may be withheld and

unspent funds recaptured by the agency upon a finding of substantial

nonperformance or breach by the applicant of its obligations under its

contract.

§ 1123 — General and administrative provisions

General and administrative provisions. 1. The agency may issue

and promulgate rules and regulations for the administration of this

article. The rules and regulations shall include provisions concerning

the eligibility of applicants for payments, grants and loans under this

article; funding criteria and the funding determination process;

supervision and evaluation of contracting applicants; reporting,

budgeting and record-keeping requirements; provisions for modification

and termination of contracts; and such other matters not inconsistent

with the purposes and provisions of this article as the agency shall

deem necessary, proper and appropriate.

2. The agency may provide technical services and assistance or

contract to provide technical services and assistance to eligible

applicants to comply with the provisions and intent of this article

which services and assistance may include but shall not necessarily be

limited to site selection, financial packaging and engineering and

architectural services necessary for the preparation of proposals for

entering into contracts or for the continued operation of a manufactured

home cooperative or for infrastructure improvement projects.

3. The agency and applicants shall deposit any recaptured funds or

funds from the repayment of loans and interest received on loans into

the manufactured home cooperative fund.

4. Notwithstanding the provisions of article one-A of the public

authorities law, contracts entered into by the agency pursuant to this

article shall not be subject to the provisions of article one-A of the

public authorities law.

5. The agency shall require the submission of the names, addresses and

business background of the principals involved, the nature of their

fiduciary relationship and their financial relationship, past, present

and future, to the project and to each other.

ARTICLE 21 Infrastructure Development Demonstration Program

§ 1130 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that there exists throughout the state a

serious shortage of affordable housing and that the cost of

infrastructure improvements, such as sewer, water and utility lines,

increases the cost of providing such housing. The legislature therefore

determines that a demonstration program should be established to provide

infrastructure development grants in conjunction with existing state,

local and federal housing programs to eligible applicants to enable, aid

and facilitate the development of affordable housing.

§ 1131 — Definitions

Definitions. 1. "Eligible applicant" shall mean a public

benefit corporation, not-for-profit corporation or charitable

organization whose purpose includes the construction or rehabilitation

of affordable housing or a municipality.

2. "Infrastructure improvements" shall mean the installation or

upgrading of water and sewer lines to a public connection, the

installation or upgrading of private wells and sanitary systems, storm

sewers and road and sidewalk construction where required by local zoning

ordinances and the installation of gas and electric lines and other site

improvements or site preparation which is necessary for the creation of

affordable housing.

3. "Affordable housing project" shall mean residential housing being

rehabilitated or constructed in conjunction with a state, federal or

local program to produce affordable housing.

4. "Agency" shall mean the New York state housing finance agency.

5. "Municipality" shall mean a county, city, town or village.

§ 1132 — Infrastructure development contracts

Infrastructure development contracts. 1. The agency is hereby

authorized, within the amounts appropriated, to enter into contracts

with eligible applicants to provide funds for infrastructure

improvements which are necessary for and will reduce the cost of the new

construction or rehabilitation of affordable housing projects. Such

contracts shall provide for grants by the agency to the eligible

applicant for infrastructure improvements carried out under the

contract. Grants shall be used to advance to or reimburse the eligible

applicant for the actual and necessary cost of providing such

infrastructure improvements, provided however that grants shall not be

used to pay the administrative costs incurred by an eligible applicant

for such improvements. Such payments, including payments to a

municipality, shall be made in accordance with the agency's prompt

payment statement adopted pursuant to section twenty-eight hundred

eighty of the public authorities law. Payment to the eligible applicant

shall not be conditioned on pre-payment for such improvements by the

eligible applicant. No such grants shall exceed an amount equal to five

thousand dollars for each unit of affordable housing to be constructed

or rehabilitated in conjunction with such infrastructure improvements.

2. The agency shall not enter into a contract under this article

except with an eligible applicant which has submitted an application to

a state, federal or local entity to receive funds for the construction

or rehabilitation of an affordable housing project and submits proof of

such application to the agency. Such contract shall contain provisions

that infrastructure development funds are dependent upon such

application being approved. Any contract for infrastructure development

funds shall contain such other information which the agency deems

appropriate, and a plan acceptable to the agency which demonstrates that

the infrastructure improvements shall be undertaken in conjunction with

the new construction or rehabilitation of an affordable housing project,

shall be completed in a timely fashion and will result in a

corresponding reduction in the cost of such affordable housing to the

occupants therein.

3. Moneys expended by the agency for the purposes of this article

shall not substitute for locally funded operating or capital

expenditures which the municipality would have allocated through its

normal budgetary process to programs that provide infrastructure

improvement in the absence of the funds provided for this program. All

such moneys shall be used to increase locally funded operating or

capital expenditures for this program to a level which is greater than

the level which would have existed if such moneys had not been provided

by the state. Nothing in this subdivision shall require the municipality

to allocate funds for this program if in the municipality's judgment

such allocation would require an increase in taxation or a reduction in

other municipal services.

4. Notwithstanding the provisions of article one-A of the public

authorities law, contracts entered into by the agency pursuant to this

article shall not be subject to the provisions of article one-A of the

public authorities law.

§ 1133 — General and administrative provisions

General and administrative provisions. 1. The agency shall

issue and promulgate rules and regulations for the administration of

this article. The rules and regulations shall include provisions

concerning eligibility of applicants for grants under this article;

funding criteria and funding determination process; evaluation of

contracting applicants; provisions for modification and termination of

contracts; and such other matters not inconsistent with the purposes and

provisions of this article as the agency shall deem necessary or

appropriate.

2. Not less than seventy-five percent of the total amount appropriated

for the purposes of this demonstration program shall be made available

for projects located in cities, towns or villages having a population of

thirty thousand or less persons; such remaining amounts shall be made

available to projects located in cities, towns or villages having a

population of more than thirty thousand persons.

3. The agency shall inform prospective eligible applicants of the

existence of this program and to the maximum extent practicable shall

provide information on this program to all applicants for housing

programs designed to promote the construction or rehabilitation of

affordable housing.

4. The agency shall enter into agreements to the extent feasible, with

other state agencies and public corporations to carry out the provisions

of this article. In entering into such agreements the agency shall

consider the extent to which funds provided pursuant to this article

would compliment the programs administered by such agencies or public

corporations. Such agreements shall be designed to allow the funds

hereunder to be used in conjunction with the programs administered by

such agencies or public corporations.

5. The agency or its designee shall require submission of the names,

addresses and business background of the principals involved, the nature

of their fiduciary relationship and their financial relationship, past,

present and future, to the project and to each other.

ARTICLE 22 Affordable Housing Development Loans

§ 1150 — Statement of legislative findings and purposes

Statement of legislative findings and purposes. It is hereby

found and declared that there exists in the city of New York a seriously

inadequate supply of safe, sanitary and affordable dwelling

accommodations for persons and families for whom the ordinary operations

of private enterprise cannot provide such accommodations. The

legislature further finds and declares that the city of New York should

be permitted to assist the private sector in the development of dwelling

accommodations affordable to such persons through establishment of a

program to provide monies to make the construction of dwelling

accommodations more affordable. It is recognized that currently the city

of New York assists the development of such housing accommodations

through the provisions of articles fifteen and sixteen of the general

municipal law which permit such assistance on city-owned sites which are

sold to private developers or non-profit groups for construction of

housing. It is intended that the city of New York also be authorized to

expend monies to assist housing development on sites which are not

city-owned. Accordingly, the legislature enacts this article to provide

such authorization and to encourage the development of additional

affordable dwelling accommodations.

§ 1151 — Definitions

Definitions. 1. "Eligible site" shall mean any real property

in the city of New York which the agency determines to be located in an

area which is blighted or deteriorated or has a blighting influence on

the surrounding area or is in danger of becoming a slum or blighted area

because of neighborhood conditions indicating an inability or

unwillingness of the private sector to invest in housing in such area.

2. "Eligible project" shall mean a project intended to construct new

housing accommodations on an eligible site by new construction or

substantial rehabilitation, provided that such new construction or

substantial rehabilitation may include climate resiliency improvements.

An eligible project shall serve the needs of persons of low income,

including privately-owned one to four family dwellings, condominiums and

cooperatives, and rental projects.

3. "Participation loan" and the city's "participation" in, "portion"

of, or "investment" in a loan, or words of similar meaning, shall mean

any loan or grant made by the agency pursuant to this article either

with or without a private lender, provided, however, that provisions of

this article concerning the repayment or forgiveness of, or security

for, a loan shall not apply to any grant.

4. "Persons of low income" for purposes of this article shall mean

those persons defined as low income pursuant to section two of this

chapter.

5. "Sponsor" shall mean any not-for-profit corporation, any public

benefit corporation or any individual, corporation or partnership which

receives a loan pursuant to this article for the construction of an

eligible project, or which receives an advance pursuant to this article

to defray the pre-development costs of any eligible project. A sponsor

who is not a not-for-profit corporation shall agree to limit its profit

in accordance with a formula satisfactory to the agency.

6. "Loan" shall mean a mortgage loan made by a private lender in

participation with the city of New York to a sponsor for the purpose of

construction of an eligible project including a loan in which the

portion of the loan funded by the agency is represented by a separate

note and mortgage.

7. "Private lender" shall mean one or more banking organizations,

foundations, labor unions, credit unions, employees' associations,

veterans' organizations, colleges, universities, educational

institutions, child care institutions, hospitals, medical research

institutes, insurance companies, trustees or fiduciaries, trustees of

pensions and retirement funds and systems, corporations, partnerships,

individuals or other entities or any combinations of the foregoing, and

shall include any public benefit corporations and the United States of

America and any of its agencies and departments. As used in this

definition, the terms "trustees" and "fiduciaries" shall include any

fiduciary or fiduciaries holding funds for investment and the term

"banking organizations" shall have the same meaning as in subdivision

eleven of section two of the banking law.

8. "Rental project" shall mean any project consisting of five or more

dwelling units occupied as a residential rental project.

9. "Agency" shall mean the department of housing preservation and

development of the city of New York or any successor thereto.

§ 1152 — Affordable housing development loans

Affordable housing development loans. 1. (a) Notwithstanding

the provisions of any general, special or local law, one or more private

lenders and the city of New York, acting through the agency, shall have

the power to participate and invest in making loans to sponsors for the

construction of eligible projects. Such loans may be made exclusively

for or may include such amounts as may be required for site acquisition

or the refinancing of eligible projects. Each such participation loan

shall be secured by a bond or note and single participating mortgage or

by separate bonds or notes and mortgages upon the eligible project. Such

bond or note and mortgage or bonds or notes or mortgages may contain

such other terms and provisions not inconsistent with the provisions of

this article as the agency may deem necessary or desirable, including,

but not limited to, terms providing that the lien created by such note

and mortgage, and, if applicable, any regulatory agreement executed by

the sponsor and such agency or restrictive covenant approved by such

agency, may be recorded in an equal or subordinate position, or

subsequently made equal or subordinate, to the lien created by any

private lender against such eligible project.

(b) Notwithstanding the provisions of any general, special or local

law, and in addition to the power to make or contract to make

participation loans granted by paragraph (a) of this subdivision, the

city of New York, acting through the agency, shall have the power to

make or contract to make loans or grants to any owner described in

paragraph (a) of this subdivision without the participation of a private

lender, on the same terms as permitted under such paragraph for a

participation loan.

2. The agency may enter into an agreement with a private lender to

deposit its share of a loan with the private lender to be advanced by

the private lender. The portion of the loan funded by the agency may be

equal to or subordinate in lien to the portion of the loan funded by the

private lender and may contain such terms with respect to interest rate,

if any, rate of amortization of principal, if any, and time of payment

of interest and principal as determined by the agency. The agency may

make provision either in the mortgage or mortgages or by separate

agreement for the performance by the private lender of such services as

are generally performed by a banking institution which itself holds a

mortgage, including, without limitation, construction loan advances,

construction supervision, initiation of foreclosure proceedings,

procurement of insurance, and all other matters in connection with the

financing, supervision, regulation and audit of any such loan to any

such eligible project.

3. If the eligible project is to consist of one to four unit dwelling

accommodations or cooperative or condominium units, the agency's share

of the loan may be converted after completion of construction into

mortgages on such dwelling accommodations or condominium units or

financing statements filed with respect to such cooperative shares,

provided such units or such cooperative shares are purchased by persons

of low income. Such mortgages and any blanket mortgage that the agency

retains on any portion of, or on all of, the eligible project may

provide that such mortgages and such blanket mortgage will automatically

be reduced to zero over a period of continuous compliance by the

mortgagor with a regulatory agreement or restrictive covenant with or

approved by the agency and upon the satisfaction of any additional

conditions specified therein. Notwithstanding such provision as

contained in such mortgage, the loan shall be reduced to zero only if,

prior to or simultaneously with delivery of such mortgage, the agency

made a written determination that such reduction would be necessary to

ensure the continued affordability or economic viability of the eligible

project. Such written determination shall document the basis upon which

the loan was determined to be eligible for evaporation. Such period of

continuous compliance with such regulatory agreement or restrictive

covenant shall not be less than fifteen years.

4. If the eligible project is to consist of one to four unit dwelling

accommodations or cooperative or condominium units, the agency shall

require that the dwelling units be offered only to bona fide purchasers

who intend to occupy a unit as their principal place of residence;

provided, however, that in the case of two to four unit dwelling

accommodations the bona fide purchaser may occupy only a single unit as

a principal place of residence. If the purchaser ceases to occupy the

unit as a principal place of residence, the agency may provide for

recapture of all or a portion of the agency's share of the loan.

5. If the eligible project is a rental project, the agency's share of

the loan may be converted after completion of construction into a

permanent loan with a term of forty years, provided that such period may

be extended as the agency may determine is necessary to ensure the

continued affordability or economic viability of the eligible project,

payable in such manner as may be provided in the note and any mortgage

in connection with such loan. Such note and mortgage may contain such

terms and conditions as the agency may deem necessary or desirable to

effectuate the purposes and provisions of this article. The sponsor or

any subsequent owner or owners of such a project shall agree to rent

such units only to persons of low income for such period as the agency

may determine. All such units shall be subject to the emergency tenant

protection act of nineteen seventy-four and the rent stabilization law

of nineteen hundred sixty-nine, as amended, unless converted to a

cooperative or condominium pursuant to subdivision seven of this

section. Initial rentals for all rental units shall be set by the

agency.

6. If the eligible project is a rental project annual profits shall be

limited to an amount set by the agency for as long as the loan is

outstanding. Excess profits shall be used to establish project reserves,

provide capital improvements or reduce the principal amount of the

agency's loan, as determined by the agency.

7. If the eligible project is a rental project, no conversion to a

cooperative or condominium shall be permitted for a period of twenty

years after initial occupancy, and unless (i) the agency's share of the

loan is prepaid upon such conversion, (ii) the conversion shall be done

pursuant to section three hundred fifty-two-eeee of the general business

law as a non-eviction plan, and (iii) apartments occupied by

non-purchasing tenants continue to be subject to the rent stabilization

law of nineteen hundred sixty-nine as amended, until the occurrence of a

vacancy.

8. A loan made pursuant to this article shall be exempt from the

mortgage recording taxes imposed by article eleven of the tax law.

9. Notwithstanding the provisions of any general, special or local law

or charter, the agency shall have power, without soliciting competing

bids, to contract with any sponsor or to make provision in a loan for

the construction or reconstruction of any site improvements located in

the public right-of-way or on the eligible site which are necessary for

the development of an eligible project. Such site improvements may

include, but shall not be limited to, streets, sidewalks, landscaping,

parks and open space, social, recreational, communal and other

non-residential facilities and the outfitting thereof, lighting

fixtures, and water and sewer lines, incidental or appurtenant to the

construction of such eligible projects.

10. No loan shall be made pursuant to the provisions of this article

unless the agency finds that: (a) the construction of the eligible

project does not directly displace current low and moderate income

residents of the eligible site; (b) the eligible project leverages

private and other public investment, if any, so as to reduce the amount

of assistance provided pursuant to this article to the minimal amount

which is necessary for construction of the eligible project; (c) the

eligible project will be built by a private developer/builder who has

agreed to limit its profit in accordance with a formula satisfactory to

the agency; (d) the eligible project will provide assistance to an area

which is blighted or deteriorated or has a blighting influence on the

surrounding area, or is in danger of becoming a slum or a blighted area

because of neighborhood conditions indicating an inability or

unwillingness of the private sector to cause the type of construction

for which a loan is to be provided; and (e) the eligible project will

make home ownership or rental housing affordable to persons who cannot

presently afford the housing available based upon the ordinary unaided

operation of private enterprise.

11. a. The agency may make non-interest bearing advances to sponsors

to defray the pre-development costs of eligible projects in accordance

with the provisions of this chapter.

b. No such advances shall be made unless the agency finds that: (i)

the sponsor proposes to finance the eligible project in whole or in part

by a loan granted pursuant to this article or that the project, if

otherwise financed, will provide housing for persons or families of low

income, and that such project is otherwise consistent with the purposes

of this article; (ii) the project site is suitable, there is a need for

the housing type proposed in the area to be served and the project is

feasible; and (iii) it is reasonable to anticipate that financing will

be obtained and the agency makes a finding to that effect.

c. No such advances may be made to a sponsor unless such sponsor

enters into an agreement with the agency which provides that such

sponsor shall be regulated with respect to rents, profits, dividends and

disposition of its property or franchise, in accordance with the

provisions of this article.

d. An advance granted pursuant to this section shall be used only to

defray the pre-development costs of eligible projects. For purposes of

this subdivision, the term pre-development costs shall include, but

shall not be limited to: the reasonable and necessary costs for

planning, site preparation, developing architectural drawings and

conducting engineering and environmental studies, but shall not include

acquisition of land or buildings, drainage and landscaping of vacant

land, construction of new buildings or the reconstruction or

rehabilitation of existing buildings.

e. Each such advance shall be repaid in full to the agency by the

sponsor. Such repayment shall be made upon receipt by the sponsor or its

successor in interest of the proceeds of its mortgage or construction

loan for the eligible project, unless the agency extends the period for

the repayment of such advances. In no event shall the time of repayment

be extended to a date later than the date of final advance of funds

pursuant to such mortgage or construction loan. Notwithstanding this

paragraph, the agency may reduce such advance to zero over a period of

continued compliance with the agency's agreement with the sponsor

pursuant to paragraph c of this subdivision if the agency has made a

written determination that such reduction would be necessary to ensure

the continued affordability or economic viability of the eligible

project. Such written determination shall document the basis upon which

the agency's non-interest bearing advance was determined eligible for

evaporation.

f. If the agency, in its discretion, determines at any time that

mortgage or construction financing for the eligible project may not be

obtained, then all advances made to the sponsor pursuant to this

subdivision shall become immediately due and payable upon the demand of

the agency.

12. If the eligible project is a rental project, the bond or note and

mortgage or bonds or notes or mortgages issued by the sponsor of any

eligible project to secure a participation loan may provide that the

city's portion of such loan shall be reduced to zero commencing on the

fifteenth year after the execution of such bond or note and mortgage or

bonds or notes or mortgages, provided that, as of the date of any such

reduction, the eligible project has been and continues to be owned and

operated in a manner consistent with a regulatory agreement with the

city. Notwithstanding such provision as contained in the bond or note

and mortgage or bonds or notes or mortgages, the loan shall be reduced

to zero only if, prior to or simultaneously with delivery of such bond

or note and mortgage or bonds or notes or mortgages, the agency made a

written determination that such reduction would be necessary to ensure

the continued affordability or economic viability of the eligible

project. Such written determination shall document the basis upon which

the loan was determined to be eligible for evaporation.

§ 1153 — General provisions

General provisions. 1. The agency shall issue and promulgate

rules and regulations for the administration of this article.

2. If any clause, sentence, paragraph, section or part of this act

shall be adjudged by any court of competent jurisdiction to be invalid,

such judgement shall not affect, impair or invalidate the remainder

thereof, but shall be confined in its operation to the clause, sentence,

paragraph, section or part thereof directly involved in the controversy

in which such judgment shall have been rendered.

ARTICLE 24 National Affordable Housing Act Program

§ 1170 — Statement of legislative findings and purposes

Statement of legislative findings and purposes. The

legislature hereby finds and declares that it is in the best interest of

the state to authorize participation in programs created by the federal

government pursuant to the national affordable housing act of 1990 and

that it is the purpose of this article to coordinate activities aided

under existing municipal, state and federal housing programs with other

public and private actions in order to address the lack of adequate

affordable housing in New York state.

§ 1171 — Definitions

Definitions. As used in this article: 1. "NAHA" shall mean the

national affordable housing act, 42 U.S.C. 12701-12839.

2. "HOME program" shall mean subtitle A of title II of the national

affordable housing act.

3. "Division" shall mean the division of housing and community

renewal.

4. "HUD" shall mean the federal department of housing and urban

development.

5. "HOME regulations" shall mean HUD regulations created pursuant to

the national affordable housing act of 1990 as amended.

6. "Applicant" shall mean any entity eligible to receive grants or

loans under the HOME program.

7. "CHAS" shall mean the New York state comprehensive housing

affordability strategy prepared in accordance with the requirements of

the national affordable housing act of 1990.

8. "Participating jurisdiction" shall mean a unit of general local

government designated by HUD to receive HOME funds through a formula

allocation.

9. "Non-participating jurisdiction" shall mean a unit of general local

government which does not receive federal funds directly under the HOME

program.

10. "Eligible activities" shall have the same meaning as set forth in

the HOME regulations.

§ 1172 — The New York state HOME program

The New York state HOME program. 1. Agreements. (a) Within

the limit of HOME program funds, the division is hereby authorized to

take administrative actions necessary to comply with HUD requirements

and consistent with the provisions of this article in order to enter

into agreements with applicants to provide grants and loans which such

applicants shall use to finance projects that qualify under HOME

regulations as eligible activities.

(b) The division shall not enter into an agreement under this article

except with an eligible applicant which has submitted an application

pursuant to a notification of fund availability and a request for

proposals issued by the division.

(c) The division and the applicant shall execute a grant or loan

agreement which shall set forth the terms and conditions under which the

grant or loan will be provided.

2. Notice of fund availability. The division shall issue its initial

notice of fund availability and request for proposals within forty-five

working days of the effective date of this article. No more than sixty

percent of the HOME funds shall be available for reservation in such

initial funding cycle. No later than sixteen months from the effective

date of this article, the division shall issue a second request for

proposals and make available those funds not committed during the

initial request for proposals, including funds recaptured by or

otherwise made available to the division by the federal government under

the HOME program. Additional requests for proposals shall be issued at

the discretion of the division but in any event no later than sixty days

following the availability of additional federal funds.

3. Application procedures. (a) Documentation determining eligibility.

The division shall provide each applicant with a list of documents that

must be included in the application before the application can be

entered into the competitive process for the awarding of grants and

loans. The division shall also include with such list of documents a

detailed description of the review and selection procedures criteria

utilized by the division pursuant to paragraph (b) of this subdivision.

Within ten working days after the last day for receipt of applications,

the division shall notify applicants if and how the application is

incomplete and provide ten working days to complete such application.

Documentation requirements shall include but not necessarily be limited

to: (1) a feasibility study and market analysis of the proposal; (2) a

proposed project financing and leveraging plan; (3) a schedule, with

specific dates, of the expected project commencement date, expected

completion date, and if appropriate, the anticipated schedule for

closing and occupancy of units; (4) a description of the applicant's

qualifications and previous experience; (5) a statement by the applicant

as to the status of all public approvals and clearances required to

undertake the project; (6) a plan as to how applicants will ensure

compliance with all federally mandated regulations throughout the

regulatory term; (7) a statement describing the amount of and source of

any matching contributions required for the proposed project and an

opinion of counsel that funds proposed to be used as matching

contributions are legally available to be used as proposed; and (8) a

statement of need and how the project will further goals delineated

within the state CHAS.

(b) The review and selection procedure. Within forty-five working days

of the effective date of this article, the division shall develop,

consistent with federal law and regulations, a review procedure and

selection criteria for evaluating applications, which shall include

design, underwriting, legal and program requirements. Such procedure and

selection criteria shall be provided to applicants with the application.

Such selection criteria shall include but not be limited to the

following factors: (1) the extent to which the proposal will serve a

demonstrated need; (2) the degree to which the proposal leverages

private investment or other funding sources; (3) the likelihood of

successful project completion, including consideration of the submitted

market analysis, the prior experience of the applicant, and the

viability of the submitted completion schedule; and (4) type of

assistance requested.

4. Selection for award and notification requirements. The division

shall base the awarding of grants and loans subject to the availability

of funds upon the competitive review and selection procedure described

in paragraph (b) of subdivision three of this section. Within eighty

working days following the last day for receipt of applications in

response to a request for proposals, the division shall notify all

applicants of its funding decisions.

(a) The division will notify, in writing, all applicants who were not

selected for funding of the reasons why the proposal was not funded,

including the design, underwriting, legal or program deficiencies,

deficiencies of any documents and/or the basis upon which the

application was determined to be ineligible for funding. Until the

issuance of a subsequent notice of fund availability, applicants not

selected for funding due solely to the non-availability of federal funds

under the notice of fund availability shall remain eligible for

selection for funding under such notice of fund availability in the

event that unused federal funds become available for reallocation.

(b) The division shall provide each applicant selected for funding

with a list of conditions that must be met prior to entering into a

contract pursuant to this article. Within fifteen working days of

receipt by the division of all documents in satisfaction of the list,

the division shall notify the applicant of the sufficiency or

insufficiency of the documents. After satisfaction by the applicant of

all conditions required by the division prior to entering into a

contract, the division shall enter into the contract within forty-five

working days of satisfaction of such conditions. Applications which are

not selected for funding must be resubmitted by the applicant for

consideration under subsequent notices of funding availability.

5. Distribution of funds. Eighty percent of the funds available

hereunder after deducting the set asides mandated by NAHA for community

housing development organizations, shall be reserved for projects

located within non-participating jurisdictions, provided however, that

such reservation may be less than eighty percent where, following a

notice of funding availability and request for proposals, the division

has made a written finding that (i) applications, except those not

selected for funding pursuant to subdivision four of this section, for

projects in non-participating jurisdictions will not totally utilize the

remaining available reserved funds and (ii) such funds are subject to

recapture by HUD pursuant to federal HOME regulations within one hundred

eighty days.

6. Monitoring and review. The division shall provide for the review,

at periodic intervals not less than annually, of the performance of

applicants receiving grants or loans pursuant to this article. Such

review shall, among other things, be for the purposes of ascertaining

the conformity to agreement provisions, and adherence to federal HOME

regulations. Agreements entered into pursuant to this article may be

terminated and funds may be withheld or recaptured by the division upon

a finding of substantial nonperformance or breach by such applicant

under its agreement or for failure to adhere to federal NAHA

requirements.

7. Notwithstanding any contrary provision of law, on and after June

thirtieth, nineteen hundred ninety-five, the division shall not issue

notices of fund availability, accept applications or enter into any new

agreements pursuant to the provisions of this section.

§ 1173 — Gap communities

* § 1173. Gap communities. Notwithstanding the provisions of section

eleven hundred seventy-two of this article the division may award funds

to one or more localities, whose allocations of HOME program funds from

the federal government are insufficient for such to become a

participating jurisdiction, as are necessary to qualify the locality as

a participating jurisdiction as set forth in 92.102 of the HOME

regulations. Provided, however, the provisions of this section shall

expire and be deemed repealed having no further force and effect on and

after September thirtieth, nineteen hundred ninety-two.

* NB Expired September 30, 1992

§ 1174 — General and administrative provisions

General and administrative provisions. 1. The division shall

issue and promulgate rules and regulations for the administration of

this article. The rules and regulations shall include provisions

concerning reporting, budgeting and recordkeeping requirements;

provision for modification, termination, extension and renewal of

agreements; and such other matters not inconsistent with the purposes

and provisions of this article as the division shall deem necessary,

proper or appropriate.

2. The division may provide appropriate technical services and

assistance to applicants to comply with the provisions of this article.

3. The division shall issue a report to the temporary president of the

senate and the speaker of the assembly, the chairpersons of the senate

and assembly housing committees and the chairpersons of the senate

finance and assembly ways and means committees on or before January

first, nineteen hundred ninety-three and annually thereafter with

respect to funds committed, contracted or disbursed pursuant to the

national affordable housing act. This report shall include but not be

limited to: a description of the programs/projects funded pursuant to

this program; the amount of funds committed, contracted or disbursed

during the previous federal fiscal year; the amount of such funds

derived from bond proceeds; the number of new affordable units

constructed or rehabilitated, including both rental and home ownership;

the number of units created which were constructed or rehabilitated by

combining NAHA funds with other state-assisted housing programs and an

accounting of the amount of such state-assisted housing program funds

expended; and any access to additional HOME funds made available through

any federal fund reallocation. In addition such report shall indicate

the status of the rules and regulations as required in subdivision one

of this section, until such rules and regulations have been promulgated.

4. All state agencies, offices, departments, boards, divisions,

commissions, public authorities and public benefit corporations may

render such services to the division within their respective functions

as may be requested by the division in order to administer the

provisions of this article.

ARTICLE 25 New York Access to Home Program

§ 1200 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that there exists in New York state a serious

need for financial and technical resources to assist renters and

property owners to make dwelling units accessible for low and moderate

income persons with disabilities. Providing assistance with the cost of

adapting homes will enable many New Yorkers with disabilities to safely

and comfortably continue to, or return to, live in their residences

instead of residing in an institutional setting. The division of housing

and community renewal shall undertake an ongoing effort to promote the

availability of the access to home programs to all potentially eligible

local administrators to encourage participation in the program. Such

actions shall include working with any other state agencies that provide

services to persons with disabilities to promote the access to home

programs. Such actions shall also include but are not limited to

providing contact and application information on the website for the

division of housing and community renewal for eligible local

administrators and potentially eligible beneficiaries which shall be

updated annually.

§ 1201 — Definitions

Definitions. As used in this article:

1. "Corporation" shall mean the housing trust fund corporation

established in section forty-five-a of this chapter.

2. "Eligible applicant" shall mean a city, town, village or

not-for-profit corporation in existence for a period of one or more

years prior to application, which is, or will be at the time of award,

incorporated under the not-for-profit corporation law and has

substantial experience in adapting or retrofitting homes for persons

with disabilities.

3. "Disabled veteran" shall mean a veteran who is certified by the

United States department of veterans affairs or the department of

defense as entitled to receive disability payments upon the

certification of such department for a disability incurred by him or her

in time of war.

4. "Access to home programs" or "programs" shall mean a series of

activities by an eligible applicant to administer funds to provide

either loans or grants to homeowners and renters and to oversee the

adaptation, retrofitting or repairs of eligible properties, provided

that such repairs are related to the habitability of an eligible

property and such repairs are related to the adaptation or retrofitting

of an eligible property.

5. "Eligible property" shall mean a housing unit that is the primary

residence of a person with a physical disability and a total household

income that does not exceed eighty percent of median income or a

disabled veteran who has a total household income that does not exceed

one hundred twenty percent of median income. A property shall not be

considered an eligible property if the owner of the property is

otherwise obligated by federal, state or local law to provide the

improvements funded under this article.

§ 1202 — Access to home contracts

Access to home contracts. 1. Within the limit of funds

available in the access to home program, the corporation is hereby

authorized to enter into contracts with eligible applicants to provide

financial assistance for the actual costs of an access to home program.

Such costs may include the costs of repairs of eligible properties,

provided that such repairs are related to the adaptation or retrofitting

of such eligible properties, that such repairs are related to the

habitability of such eligible properties, and that the access to home

funds provided to cover the cost of such repairs does not exceed sixty

percent of the access to home program grant or loan. The financial

assistance shall be either in the form of grants or loans, as the

corporation shall determine. No more than fifty percent of the total

amount awarded pursuant to this article in any fiscal year shall be

allocated to access to home programs located within any single

municipality.

2. The total payment pursuant to any one contract shall not exceed

five hundred thousand dollars and the contract shall provide for

completion of the program within a reasonable period, as specified

therein, which shall not in any event exceed three years from its

commencement. Upon request, the corporation may extend the term of the

contract for up to two additional one year periods for good cause shown

by the eligible applicant.

3. The corporation may authorize the eligible applicant to spend up to

ten percent of the contract amount for approved administrative costs

associated with administering the program.

4. The corporation shall require that, in order to receive funds

pursuant to this article, the eligible applicant shall submit a plan

which shall include, but not be limited to, program feasibility, impact

on the community, budget for expenditure of program funds, a schedule

for completion of the program, affirmative action and minority business

participation.

§ 1203 — Report

Report. 1. The division of housing and community renewal shall

issue an annual report on the access to home programs regarding certain

data and program progress for the previous year, provided that reporting

on paragraphs (e), (f) and (g) of this subdivision shall relate to

contracts that have concluded in the previous year, as applicable. Such

report shall include, but not be limited to:

(a) the number of received applications to become local

administrators;

(b) the number of applications to become local administrators selected

for award and contract;

(c) the amount of funding awarded to local administrators;

(d) the geographic area to be served by local administrators;

(e) the number of beneficiaries awarded;

(f) the average award to beneficiaries; and

(g) the number of potential beneficiaries who applied for an award and

were deemed ineligible for such award.

2. Such report required pursuant to subdivision one of this section

shall be posted and made publicly available on the division of housing

and community renewal's website in a clear and conspicuous manner.

ARTICLE 26 New York Main Street Program

§ 1220 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that there exists in New York state a serious

need for financial and technical resources to help communities with

their efforts to preserve and revitalize main street and downtown

business districts which include commercial and residential uses. The

legislature therefore finds that a program should be established to

provide financial assistance to stimulate reinvestment in properties

located within main street, mixed-use commercial, and downtown business

districts in urban, small town, and rural areas by preserving existing

housing units, fostering the development of new housing units, upgrading

commercial and retail areas, and by creating innovative approaches to

neighborhood and community revitalization, including the improvement of

cultural, civic and community facilities.

§ 1221 — Definitions

Definitions. As used in this article:

1. "Corporation" shall mean the housing trust fund corporation

established in section forty-five-a of this chapter.

2. "Eligible applicant" shall mean a unit of local government or

not-for-profit corporation in existence for a period of one or more

years prior to application, which is, or will be at the time of award,

incorporated under the not-for-profit corporation law and has been

engaged primarily in community development activities.

3. "Eligible area" shall mean an area: (i) that has experienced

sustained physical deterioration, decay, neglect, or disinvestment; (ii)

has a number of substandard buildings or vacant residential or

commercial units; and (iii) in which more than fifty percent of the

residents are persons of low income, or which is designated by a state

or federal agency to be eligible for a community or economic development

program.

4. "Main street program" or "program" shall mean a proposal by an

eligible applicant for a specific work or series of works for the

revitalization and improvement of an eligible area through the creation,

preservation or improvement of residential housing units; local

commercial facilities; public facilities or other aspects of the area

environment. Not less than eighty percent of the total amount awarded

pursuant to this article in any fiscal year shall be allocated to main

street programs that include the creation, preservation or improvement

of residential housing units as an objective.

5. "Persons of low income" shall mean those persons and families whose

incomes do not exceed ninety percent of the area median income for the

county in which a project is located as calculated by the United States

department of housing and urban development.

§ 1222 — Main street contracts

Main street contracts. 1. Within the limit of funds available

in the main street program, the corporation is hereby authorized to

enter into contracts with eligible applicants to provide financial

assistance for the actual costs of a main street program. The financial

assistance shall be either in the form of payments, grants or loans, as

the corporation shall determine. No more than fifty percent of the total

amount awarded pursuant to this article in any fiscal year shall be

allocated to main street programs located within any single

municipality.

2. The total payment pursuant to any one contract shall not exceed

five hundred thousand dollars and the contract shall provide for

completion of the program within a reasonable period, as specified

therein which shall not in any event exceed two years from its

commencement. Upon request, the corporation may extend the term of the

contract for up to an additional two year period for good cause shown by

the eligible applicant.

3. The corporation may authorize the eligible applicant to spend up to

seven and one-half percent of the contract amount for approved planning

and administrative costs of carrying out a program.

4. The corporation shall provide technical assistance and training to

eligible applicants to help communities with their efforts to preserve

and revitalize main street and downtown business districts consistent

with the legislative findings and purpose of this article.

5. The corporation shall require that, in order to receive funds

pursuant to this article, the eligible applicant must submit a plan

which shall include but not be limited to program feasibility,

leveraging of other resources, impact on the community, affirmative

action and minority business participation.

6. If the eligible applicant is a not-for-profit corporation, its

officers, directors and members must be representative of the residents

and other legitimate interests of the community.

7. The owner of a property improved with funds made available under

this article must agree for a minimum of five years to: maintain the

property in good operating order and condition; to make available and

maintain the affordability of residential housing units to persons of

low income; and to obtain the consent of the corporation prior to making

alterations to the property or changing its use.

ARTICLE 27 Rural and Urban Community Investment Fund Program

§ 1230 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

finds and declares that there exists in New York state a serious need to

assist communities with the creation and improvement of affordable

housing, and the commercial, retail and community facilities related to

mixed use affordable residential developments. Locally based

not-for-profit organizations play a significant role in addressing the

unique characteristics of rural and urban communities. Partnerships,

alliances and collaborations with corporate entities, to the extent

practicable, will foster cross-sector collaboration in order to build a

diverse community support system. The legislature finds that, in both

rural and urban areas of the state, a program should be established to

fund the creation, preservation and/or improvement of affordable

housing; or the creation, preservation or improvement of the commercial,

retail or community facilities component of mixed use affordable

residential developments.

§ 1231 — Definitions

Definitions. 1. "Corporation" shall mean the housing trust

fund corporation established in section forty-five-a of this chapter.

2. "Rural and urban community investment fund program" shall mean

activities by an eligible applicant for a specific work or series of

works for the creation, preservation or improvement of affordable

housing, or the creation, preservation or improvement of the commercial,

retail or community facilities component of mixed use affordable

residential developments, in rural and urban areas of the state.

3. "Rural area of the state" shall mean cities, towns and villages

having a population of less than twenty-five thousand as determined by

the last federal decennial census.

4. "Urban area of the state" shall mean any unit of local government

within the state with a population of more than or equal to twenty-five

thousand persons as determined by the last federal decennial census.

5. "Eligible applicant" shall include a not-for-profit corporation or

charitable organization, or a wholly-owned subsidiary of such a

corporation or organization, or a private for-profit developer such as a

person, corporation, partnership or limited liability company.

6. "Affordable residential development" shall include residential

units that are rent restricted and occupied by persons and families

whose income does not exceed ninety percent of area median income for

the county in which a project is located as calculated by the United

States department of housing and urban development.

§ 1232 — Rural and urban community investment fund

Rural and urban community investment fund. 1. Within amounts

appropriated or otherwise available therefor, the housing trust fund

corporation shall develop and administer a rural and urban community

investment fund program which shall provide assistance in the form of

payments, grants and loans for reasonable and necessary expenses, to an

eligible applicant for the creation, preservation or improvement of

affordable housing; or the creation, preservation or improvement of the

commercial, retail or community facilities component of mixed use

affordable residential developments, in rural and urban areas of the

state.

2. Program criteria. The corporation shall develop procedures,

criteria and requirements related to the application and award of

projects pursuant to this section which shall include: eligibility,

market demand, feasibility and funding criteria; the funding

determination process; supervision and evaluation of contracting

applicants; reporting, budgeting and record-keeping requirements;

provisions for modification and termination of contracts; and such other

matters not inconsistent with the purposes and provisions of this

article as the corporation shall deem necessary or appropriate.

3. Fund allocation. Sixty percent of the total funds awarded pursuant

to this article in any fiscal year shall be allocated to projects

located in urban areas of the state. Forty percent of the total funds

awarded pursuant to this article in any fiscal year shall be allocated

to projects located in rural areas of the state.

4. Funding criteria. A one-third match requirement shall be required

of any eligible applicant, which may include donated property, materials

or labor and other resources, and may be reduced or eliminated for

projects located within a declared disaster area.

5. Funding and annual report. The corporation in its sole discretion

shall authorize all funding decisions and make all award announcements.

The corporation shall, on or before December thirty-first in each year

submit a report to the legislature on the implementation of this

article. Such report shall include, but not be limited to, for each

award made to a grantee under this article: a description of such award;

contract amount and cumulative total; the specific activities in rural

and urban areas performed by such grantee; the amounts of match monies

received by the grantee from sources other than payments made pursuant

to this article; and such other information as the corporation deems

pertinent.

ARTICLE 29 Residential Emergency Services to Offer Home Repairs to the Elderly Program

§ 1260 — Statement of legislative findings

Statement of legislative findings. The legislature hereby

finds and declares that there exists in New York state a need for

financial resources to assist senior citizen homeowners with the cost of

addressing emergencies and code violations that pose a threat to their

health and safety, or affecting the livability of their home. Providing

assistance for the cost of making such critical repairs will enable many

seniors to continue to live independently in their own homes.

§ 1261 — Definitions

Definitions. As used in this article:

1. "Corporation" shall mean the housing trust fund corporation

established in section forty-five-a of this chapter.

2. "Eligible applicant" shall mean a unit of local government or

not-for-profit corporation in existence for a period of one or more

years prior to application, which is, or will be at the time of award,

incorporated under the not-for-profit corporation law and has been

engaged primarily in housing and community development activities.

3. "Residential emergency services to offer home repairs to the

elderly programs" shall mean a series of activities by an eligible

applicant to administer funds to provide either loans or grants to

homeowners sixty years of age or older, with a household income of less

than one hundred percent of the area median income, to oversee the

adaptation or retrofitting of eligible properties.

4. "Eligible property" shall mean a housing unit that is the primary

residence of a person that is sixty years of age or older and have a

household income that does not exceed one hundred percent of the area

median income.

§ 1262 — Residential emergency services to offer home repairs to the elderly contracts

Residential emergency services to offer home repairs to the

elderly contracts. 1. Within the limit of funds available in the

residential emergency services to offer home repairs to the elderly

program, the corporation is hereby authorized to enter into contracts

with eligible applicants to provide financial assistance for the actual

costs of a residential emergency services to offer home repairs to the

elderly program. The financial assistance shall be either in the form of

grants or loans, as the corporation shall determine. Funds must be used

for one- to four-unit dwellings that are owned and occupied by eligible

households, and work undertaken cannot exceed twenty thousand dollars

per building. No more than fifty percent of the total amount awarded

pursuant to this article in any fiscal year shall be allocated to any

residential emergency services to offer home repairs to the elderly

program located within any single municipality.

2. From the date of the emergency referral, all repairs must be

completed within sixty business days of the start of the repairs

provided, however, that the commissioner shall grant the eligible

applicant additional time for good cause.

3. The total payment pursuant to any one contract shall not exceed

five hundred thousand dollars and the contract shall provide for

completion of the program within a reasonable period, as specified

therein, which shall not in any event exceed three years from its

commencement. Upon request, the corporation may extend the term of the

contract for up to two additional one year periods for good cause shown

by the eligible applicant.

4. The corporation shall authorize the eligible applicant to spend ten

percent of the contract amount for approved planning and administrative

costs associated with administering the program.

ARTICLE 30 New York Access to Home For Heroes Program

§ 1270 — Statement of legislative findings and purpose

Statement of legislative findings and purpose. The legislature

hereby finds and declares that many disabled veterans in New York state

face a significant impediment to accessible and affordable housing as a

result of service related injuries, age or health related disabilities.

These men and women have served our country and state with honor and

distinction and deserve to achieve maximum independence, social

interaction and community integration. Providing financial assistance

with the cost of adapting the dwelling units of our disabled veterans,

is fundamental to providing for the promise of living safely,

comfortably and productively in the most integrated setting of their

choice.

§ 1271 — Definitions

Definitions. As used in this article:

1. "Corporation" shall mean the housing trust fund corporation

established in section forty-five-a of this chapter.

2. "Eligible applicant" shall mean a city, town, village or

not-for-profit corporation in existence for a period of one or more

years prior to application, which is, or will be at the time of award,

incorporated under the not-for-profit corporation law and has

substantial experience in adapting or retrofitting homes for persons

with disabilities.

3. "Veteran" shall mean a veteran as defined in section one of the

veterans' services law, or is a discharged LGBT veteran, as defined in

section one of the veterans' services law, who is a resident of the

state and has received a discharge other than bad conduct or

dishonorable from such service.

4. "Disabled veteran" shall mean a veteran with, including but not

limited to, a permanent physical or medical impairment resulting from an

anatomical or physiological condition which prevents the exercise of a

normal bodily function, substantially limits a major life activity or

which is demonstrable by medically accepted clinical or laboratory

diagnostic techniques. A professional evaluation must be provided which

identifies the disability, describes the substantial limitation caused

by the disability, and recommends potential structural modifications to

improve the activities of daily living within and/or access to such

residence in consideration of such disability.

5. "Access to home for heroes programs" or "programs" shall mean a

series of activities by an eligible applicant to administer funds to

provide grants to homeowners and renters and to oversee the adaptation,

retrofitting or repairs of eligible properties, provided that such

repairs are related to the habitability of an eligible property and such

repairs are related to the adaptation or retrofitting of an eligible

property.

6. "Eligible property" shall mean a housing unit that is the primary

residence of a disabled veteran and a total household income that does

not exceed one hundred and twenty percent of area median income. A

property shall not be considered an eligible property if the owner of

the property is otherwise obligated by federal, state or local law to

provide the improvements funded under this article.

§ 1272 — Access to home for heroes contracts

Access to home for heroes contracts. 1. Within the limit of

funds available in the access to home for heroes program, the

corporation is hereby authorized to enter into contracts with eligible

applicants to provide financial assistance for the actual costs of an

access to home for heroes program. Such costs may include the costs of

repairs of eligible properties, provided that such repairs are related

to the adaptation or retrofitting of such eligible properties, that such

repairs are related to the habitability of such eligible properties, and

that the access to home for heroes funds provided to cover the cost of

such repairs does not exceed sixty percent of the access to home for

heroes program grant or loan. The financial assistance shall be in the

form of grants. No more than fifty percent of the total amount awarded

pursuant to this article in any fiscal year shall be allocated to access

to home programs located within any single municipality.

2. The total payment pursuant to any one contract shall not exceed

five hundred thousand dollars and the contract shall provide for

completion of the program within a reasonable period, as specified

therein, which shall not in any event exceed three years from its

commencement. Upon request, the corporation may extend the term of the

contract for up to two additional one year periods for good cause shown

by the eligible applicant.

3. The corporation shall authorize the eligible applicant to spend ten

percent of the contract amount for approved administrative costs

associated with administering the program.

4. The corporation shall require that, in order to receive funds

pursuant to this article, the eligible applicant shall submit a plan

which shall include, but not be limited to, program feasibility, impact

on the community, budget for expenditure of program funds, a schedule

for completion of the program, affirmative action and minority business

participation.

ARTICLE 31 Housing Our Neighbors With Dignity Program

§ 1280 — Legislative findings and purpose

Legislative findings and purpose. The state of New York,

through the housing trust fund corporation, is empowered to finance the

purchase, acquisition, holding or conversion of distressed hotels and

commercial office properties for use as affordable permanent housing

that meets standards established to ensure safety, habitability,

quality, and access to supportive services as appropriate, to be made

available to low-income households and people experiencing homelessness

immediately prior to entering such housing. These properties shall be

owned, operated and managed by appropriate nonprofit organizations

through the use of government agency funding, pursuant to such

appropriation to support the creation of an adaptive reuse affordable

housing program, to acquire and/or convert the property.

The acquired properties shall be converted into permanently affordable

housing modeled as financially and operationally deemed necessary by the

state or appropriate nonprofit organization for the purposes of creating

supportive or permanently affordable housing units; provided that the

housing shall remain affordable as defined by the term affordable

housing included in this article.

§ 1281 — Definitions

Definitions. For the purposes of this article, the following

terms shall have the following meanings:

1. "Corporation" shall mean the housing trust fund corporation

established pursuant to section forty-five-a of this chapter.

2. "Appropriate nonprofit organization" shall mean a not-for-profit

corporation formed pursuant to the not-for-profit corporation law and

exempt pursuant to section 501(c)(3) or 502(c)(4) of the Internal

Revenue Code of 1984 as amended and that:

(a) Has as one of such organization's primary purposes:

(i) The provision of housing that is affordable to low-income

families; or

(ii) The provision of services or housing for individuals or families

experiencing homelessness; or

(b) Is otherwise considered by the state as a suitable housing

management organization, by a vetting process developed by the

corporation.

3. "Affordable housing" shall mean permanent housing that is

affordable to low and moderate-income households, such that the new

housing achieves income averaging at or below sixty percent of the area

median income, with residents' eligibility capped at a maximum of eighty

percent of the area median income at the start of their lease.

Applicants shall not be rejected from eligibility based on credit

histories or credit scores.

4. "Building service employee" shall mean any person who is regularly

employed at, and performs work in connection with the care or

maintenance of, a converted property in a city with a population of one

million or more, including but not limited to, a watchman, guard,

doorman, building cleaner, porter, handyman, janitor, gardener,

groundskeeper, elevator operator and starter, or window cleaner.

5. "Distressed" shall mean an available asset that is financially

distressed as determined by the corporation.

6. "Exempt supportive housing" shall mean converted property for which

a nonprofit organization has:

(a) entered into a regulatory agreement with a federal, state, or

local government entity in a city with a population of one million or

more that requires:

(i) at least fifty percent of the residential units in such converted

property be reserved for homeless, disabled individuals or homeless

families with a disabled head-of-household; and

(ii) the provision of on-site supportive services to the residents of

at least fifty percent of the residential units; and

(b) the remaining fifty percent of the residential units in such

converted property rented to households earning, on average, up to

eighty percent of the area median income, adjusted for household size.

7. "Experiencing homelessness" shall refer to those individuals

residing in shelters, transitional housing, public spaces, and other

types of emergency housing.

8. "Fiscal officer" shall mean the comptroller of the city of New York

or other analogous officer of such city.

9. "Prevailing wage" shall mean the rate of wages and supplemental

benefits paid in the locality to workers in the same trade or occupation

and annually determined by the fiscal officer in accordance with the

provisions of section two hundred thirty-four of the labor law.

10. "Rent stabilized" shall mean collectively, the rent stabilization

law of nineteen hundred sixty-nine, the rent stabilization code, and the

emergency tenant protection act of nineteen seventy-four, all as in

effect as of the effective date of the chapter of the laws of two

thousand twenty-one that added this subdivision or as amended

thereafter, together with any successor statutes or regulations

addressing substantially the same subject matter.

11. "Small converted property" shall mean a converted property project

(a) to improve no more than one hundred nineteen residential units in

one or more buildings; and (b) which has received financial assistance

pursuant to this article.

§ 1282 — Housing our neighbors with dignity program

Housing our neighbors with dignity program. 1. Establishment.

Subject to amounts available by appropriation therefor, the corporation

shall develop a housing our neighbors with dignity program (hereinafter

referred to as "the program"), which shall provide a mechanism for the

state to finance the acquisition and/or conversion of distressed hotels

and commercial office properties by appropriate nonprofit organizations

for the purpose of maintaining or increasing affordable housing. All

affordable housing properties produced through this program shall remain

permanently affordable, and all converted properties in a city with a

population of one million or more, with the exception of small converted

properties and exempt supportive housing, shall be required to pay

building service employees the applicable prevailing wage pursuant to

subdivision one-a of this section. Permanent affordability restrictions

shall require a regulatory agreement with the corporation or local

housing agency or other affordability restrictions in recorded documents

not specifically listed in this subdivision, provided the corporation or

local housing agency determines that such restrictions are enforceable

and likely to be enforced. Such enforcement measures shall include but

not be limited to the ability to cancel or transfer the regulatory

agreement or property to another entity for violating the terms of such

regulatory agreement, such as failure to meet the minimum obligations

set forth in this article when such failure is not cured.

1-a. In a city with a population of one million or more, all building

service employees employed by an appropriate nonprofit organization at a

converted property or otherwise employed at a converted property that is

not a small converted property or exempt supportive housing shall

receive at least the applicable prevailing wage in such city for craft,

trade, or occupation of such building service employee. The fiscal

officer shall have the power to enforce such provisions in the same

manner as provided under subparagraph (iii) of paragraph (g) of

subdivision seventeen of section four hundred twenty-one-a of the real

property tax law. In addition, the fiscal officer shall have the power

to conduct an investigation and hearing and file a determination as to

the payment of wages owed by a lessee, owner, successor, or any employer

of building service employees, as provided under subdivisions one, four,

five, six, eight and nine of section two hundred thirty-five of the

labor law.

2. Purpose. The program shall seek to:

(a) Finance the acquisition of distressed hotels and commercial office

properties by appropriate nonprofit organizations for the purpose of

stabilizing communities and the housing market;

(b) Finance the conversion and rehabilitation of the physical

condition of acquired property by appropriate nonprofit organizations in

order to improve the condition of such property for future occupants,

such as habitability and environmental sustainability; and

(c) Provide an appropriate, expedient and efficient manner for owners

of such distressed properties to transfer ownership to an appropriate

nonprofit organization so as to promote the state's interest in the

conversion of such properties to new supportive and affordable permanent

housing units.

3. Powers. The state may finance the purchase, acquisition, conversion

and/or holding by appropriate nonprofit organizations of distressed

hotel or commercial office properties in any part of the state for the

purpose of maintaining or increasing the stock of affordable, stable,

quality housing; provided that in the case of a property at which any

hotel workers are represented by a collective bargaining representative,

prior to the proposed acquisition, the collective bargaining

representative shall be notified in writing of the proposed acquisition,

and the property owner shall certify prior to the state initiating such

acquisition through financing that the collective bargaining

representative has mutually agreed in a separate writing with the

property owner to take the specific acquisition described in the written

notice.

4. Converted properties. All properties converted to affordable

housing pursuant to this section shall meet the minimum standards of

habitability, safety and quality of life for all established housing.

Additional operating expenses shall be met through any combination of

subsidies, vouchers, commercial rents, or other sources of income

available to the housing provider under the model the non-profit chooses

to pursue. All units shall be rent stabilized as defined in this article

in localities that have adopted or opted in to the rent stabilization

law. At least fifty percent of all converted units shall be set aside

for individuals and families who were experiencing homelessness

immediately prior to entering such converted affordable housing. Each

unit must contain, at a minimum, a living/sleeping space, private

bathroom with bath or shower, and either a full kitchen or a kitchenette

with at least a 7-cubic feet capacity refrigerator, sink, cooktop,

microwave oven and outlets for countertop appliances.

5. Restrictions. The state shall not, in any case, facilitate the sale

or transfer of property unless the state has entered into an agreement

with the appropriate nonprofit organization to ensure that any actions

necessary to bring the property into compliance with applicable

building, safety, health and habitability codes and requirements will be

taken before such property is occupied.

6. Tenant protections. Tenants residing in properties converted to

affordable housing pursuant to this section shall have full tenancy

rights, including all the tenant protections pursuant to rent

stabilization as defined in this article in localities that have adopted

or opted in to the rent stabilization laws. Tenancy in such affordable

housing shall not be restricted on the basis of sexual identity or

orientation, gender identity or expression, conviction or arrest record,

credit history, credit score, or immigration status.

ARTICLE 32 New York Housing For the Future Homeownership and Rental Housing Programs

§ 1290 — New York housing for the future homeownership program

New York housing for the future homeownership program. 1.

Program establishment. Within amounts appropriated or otherwise

available therefor, the division of housing and community renewal, the

housing trust fund corporation, or the housing finance agency shall

develop and administer a program which shall provide assistance in the

form of payments, grants and loans for the formation of limited equity

cooperative housing utilizing funding appropriated for such a purpose as

well as any other funding source or sources which the commissioner may

determine is suitable to support such a program. Such program may

utilize any appropriate site, including, but not limited to, state owned

sites, municipally owned sites, or sites owned by a not-for-profit

corporation or community land trust for the purpose of providing housing

pursuant to this section. Real property may be acquired by a

municipality for the purpose of such program as authorized pursuant to

section five hundred seventy-six-a of this chapter, provided, however,

that any acquisitions or transfers undertaken to further the goals of

this article pursuant to such section shall not be required to be

transferred to a housing development fund company incorporated and

organized pursuant to section five hundred seventy-three of this

chapter. Such program shall provide (a) housing for households with an

income up to one hundred and thirty percent of area median income at the

time of purchase, provided further that households that are initially

eligible for the program at the time of purchase but realize income

gains subsequent to purchase may be required to pay a surcharge as

determined by the division of housing and community renewal or other

supervising agency, as the case may be, (b) a process in which

households shall have the ability to accrue equity over time, and (c)

that housing units created pursuant to this section remain affordable in

perpetuity. The commissioner may also assist prospective homebuyers to

identify funding sources that provide low interest loans to prospective

homebuyers.

2. Additional responsibilities. The division of housing and community

renewal, the housing trust fund corporation, or the housing finance

agency shall have the power to issue regulations, plans, guidance

documents, or set terms in regulatory agreements to implement such

program and the process for:

(a) homebuyers obtaining a new unit which shall include both

confirming income qualifications as well as a restriction on the maximum

amount of assets any qualified homebuyer may have;

(b) selling shares in the cooperative in such a way as the

affordability of the cooperative is maintained while allowing households

to gain equity over time;

(c) prohibiting the use of a fixed percentage appreciation cap for the

purposes of determining an allowable sales price for shares in the

cooperative;

(d) selecting new households eligible to purchase housing which has

been vacated by a previous owner; and

(e) the creation of boards of directors for such limited profit

housing companies established by this chapter, provided however that

such boards shall have the powers and be subject to the limitations

contained in the not-for-profit corporation law in the same manner and

subject to the same exceptions as set forth in section thirteen-a of the

this chapter.

3. Management. All such housing projects shall be managed

independently of the residents of the project by a corporation or

not-for-profit corporation determined qualified by the division of

housing and community renewal or other supervising agency, as the case

may be, provided further that the board of the limited equity

cooperative housing corporation shall have oversight over such qualified

corporation or not-for-profit corporation in accordance with standards

or guidelines set by the division of housing and community renewal or

other supervising agency, as the case may be. Any regulatory agreement

that is executed for such program shall include a requirement that

resident maintenance fees increase by a minimum percentage annually to

ensure that such housing continues to be in good repair.

4. Tax exemptions. Housing for such program shall be eligible for tax

exemptions in the same manner as projects under article eleven of this

chapter.

5. Wage requirements. Notwithstanding any law, rule, or regulation to

the contrary, any project constructed pursuant to this section shall be

subject to prevailing wage requirements in accordance with sections two

hundred twenty and two hundred twenty-b of the labor law; provided,

however, such requirements shall not apply to construction work

performed under a pre-hire collective bargaining agreement between an

owner or developer and a bona fide building and construction trade labor

organization which has established itself and/or its affiliates as the

collective bargaining representative for all persons who will perform

work on such a project, and which provides that only contractors and

subcontractors who sign a pre-negotiated agreement with the labor

organization can perform work on such a project.

§ 1291 — New York housing for the future rental housing program

New York housing for the future rental housing program. 1.

Program establishment. Within amounts appropriated or otherwise

available therefor, the division of housing and community renewal, the

housing trust fund corporation, or the housing finance agency shall

develop and administer a program which shall provide assistance in the

form of payments, grants and loans for the formation of income-limited

rental housing utilizing funding appropriated for such a purpose as well

as any other funding source or sources which the commissioner may

determine is suitable to support such a program. Such program may

utilize any appropriate site, including, but not limited to, state owned

sites, municipally owned sites, or sites owned by a not-for-profit

corporation or community land trust for the purpose of providing housing

pursuant to this section. Real property may be acquired by a

municipality for the purpose of such program as authorized pursuant to

section five hundred seventy-six-a of this chapter, provided, however,

that any acquisitions or transfers undertaken to further the goals of

this article pursuant to such section shall not be required to be

transferred to a housing development fund company incorporated and

organized pursuant to section five hundred seventy-three of this

chapter. Such program shall provide (a) housing for households with an

income up to one hundred and thirty percent of area median income at the

time such household initially occupies a unit, provided further that

households that are initially eligible for the program at the time such

household initially occupies a unit but realize income gains subsequent

to occupying such unit may be required to pay a surcharge as determined

by the division of housing and community renewal or other supervising

agency, as the case may be, and (b) that housing units created pursuant

to this section remain affordable in perpetuity.

2. Additional responsibilities. The division of housing and community

renewal, the housing trust fund corporation, or the housing finance

agency shall have the power to issue regulations, plans, guidance

documents, or set terms in regulatory agreements to implement such

program and the process for: (a) renters leasing a unit which shall

include both confirming income qualifications as well as a restriction

on the maximum amount of assets any qualified renter may have; (b)

selecting new households eligible to rent housing which has been vacated

by a previous renter; and (c) the creation of boards of directors for

such income-limited rental housing companies established by this

chapter, provided however that such boards shall have the powers and be

subject to the limitations contained in the not-for-profit corporation

law in the same manner and subject to the same exceptions as set forth

in section thirteen-a of this chapter.

3. Management. All such income-limited rental housing projects shall

be managed independently of the residents of the project by a

corporation or not-for-profit corporation determined qualified by the

division of housing and community renewal or other supervising agency,

as the case may be, in accordance with standards or guidelines set by

the division of housing and community renewal or other supervising

agency, as the case may be. Any regulatory agreement that is executed

for such program shall include a requirement that resident rent

increases by a minimum percentage annually to ensure that such housing

continues to be in good repair.

4. Tax exemptions. Housing for such program shall be eligible for tax

exemptions in the same manner as projects under article eleven of this

chapter.

5. Wage requirements. Notwithstanding any law, rule, or regulation to

the contrary, any project constructed pursuant to this section shall be

subject to prevailing wage requirements in accordance with sections two

hundred twenty and two hundred twenty-b of the labor law; provided,

however, such requirements shall not apply to construction work

performed under a pre-hire collective bargaining agreement between an

owner or developer and a bona fide building and construction trade labor

organization which has established itself and/or its affiliates as the

collective bargaining representative for all persons who will perform

work on such a project, and which provides that only contractors and

subcontractors who sign a pre-negotiated agreement with the labor

organization can perform work on such a project.