A05373 Summary:

BILL NO    A05373 

SAME AS    SAME AS S01493

SPONSOR    O'Donnell (MS)

COSPNSR    Wright, Silver, Glick, Ortiz, Gottfried, Kavanagh, Farrell, Perry,
           Titus, Mayer, Mosley, Aubry, Weprin

MLTSPNSR   Brennan, Brook-Krasny, Clark, Cook, Cymbrowitz, Dinowitz, Heastie,
           Hooper, Jacobs, Kellner, Lentol, Millman, Scarborough

Amd SS26-405 & 26-511, NYC Ad Cd; amd S6, Emerg Ten Prot Act of 1974; amd S4,
Emerg Hous Rent Cont L

Establishes a methodology for determining major capital improvements (MCI) rent
surcharges based on a seven year schedule; provides that such MCI shall be
calculated as a rent surcharge and shall not become part of the base legal
regulated rent by which rent increases are calculated, and requires the amount
thereof to be separately designated and billed as such; codifies current
practices regarding the annual 6% cap on MCI increases and the methodology for
determining MCI surcharges based on the number of rooms; requires that rent
surcharges authorized for major capital improvements shall cease when the cost
of the improvement has been recovered.
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A05373 Actions:

BILL NO    A05373 

02/25/2013 referred to housing
03/20/2013 reported 
03/20/2013 advanced to third reading cal.117
06/13/2013 passed assembly
06/13/2013 delivered to senate
06/13/2013 REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
01/08/2014 DIED IN SENATE
01/08/2014 RETURNED TO ASSEMBLY
01/08/2014 ordered to third reading cal.248
01/14/2014 committed to housing
01/27/2014 reported 
01/30/2014 advanced to third reading cal.418
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A05373 Votes:

A05373 06/13/2013 93/48
AbbateYColtonYGarbariNOKearnsYMillmanYRiveraERStevensY
AbinantYCookYGibsonYKellnerYMontesaNORobertsYStirpeY
ArroyoYCorwinNOGiglioNOKimYMorelleYRobinsoYSweeneyY
AubryYCrespoYGjonajYKolbNOMosleyYRodriguYTediscoNO
BarclayNOCrouchNOGlickYLalorNOMoyaYRosaYTenneyNO
BarrettNOCurranNOGoldfedYLavineYNojayNORosenthYThieleY
BarronYCusickNOGoodellNOLentolYNolanYRozicYTitoneY
BenedetYCymbrowYGottfriYLiftonYOaksNORussellYTitusY
BlankenNODenDekkERGrafNOLopezNOO'DonneYRyanYWalterNO
BorelliNODinowitYGuntherNOLupardoYOrtizYSaladinERWeinsteY
BoylandABDiPietrNOHawleyNOLupinacNOOtisYSantabaNOWeisenbY
BraunstYDupreyERHeastieYMageeYPalmesaNOScarborYWeprinY
BrennanYEnglebrYHennessYMagnareYPaulinNOSchimelYWrightY
BrindisNOEspinalYHevesiYMaiselYPeoplesYSchimmiYZebrowsY
BronsonYFahyYHikindERMalliotYPerryYSepulveYMr SpkrY
Brook-KYFarrellYHooperYMarkeyYPretlowYSimanowY
BuchwalYFinchNOJacobsYMayerYQuartYSimotasY
ButlerNOFitzpatNOJaffeeYMcDonalYRaNOSkartadY
CahillYFriendNOJohnsNOMcDonouNORabbittNOSkoufisY
CamaraYGabryszNOJordanNOMcKevitNORaiaNOSolagesY
CerettoNOGalefNOKatzNOMcLaughNORamosYStecNO
ClarkYGanttNOKavanagYMillerYReilichNOSteckY

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A05373 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                         5373

                              2013-2014 Regular Sessions

                                 I N  A S S E M B L Y

                                   February 25, 2013
                                      ___________

       Introduced  by  M.  of A. O'DONNELL, WRIGHT, SILVER, GLICK, ORTIZ, GOTT-
         FRIED, KAVANAGH, FARRELL,  PERRY,  TITUS,  CASTRO,  MAYER,  MOSLEY  --
         Multi-Sponsored  by -- M. of A. BARRON, BRENNAN, CLARK, COOK, CYMBROW-
         ITZ, DINOWITZ, HEASTIE,  HOOPER,  JACOBS,  KELLNER,  LENTOL,  MILLMAN,
         SCARBOROUGH -- read once and referred to the Committee on Housing

       AN  ACT  to  amend  the administrative code of the city of New York, the
         emergency tenant protection act of nineteen seventy-four and the emer-
         gency housing rent control law, in relation to extending the length of
         time over which major capital improvement expenses may be recovered

         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
    2  26-405 of the administrative code of the city of New York, as amended by
    3  chapter 749 of the laws of 1990,  is amended to read as follows:
    4    (g) (I) COLLECTION OF SURCHARGES TO THE MAXIMUM RENT AUTHORIZED PURSU-
    5  ANT  TO  ITEM  (II)  OF THIS SUBPARAGRAPH SHALL CEASE WHEN THE OWNER HAS
    6  RECOVERED THE COST OF THE MAJOR CAPITAL IMPROVEMENT;
    7    (II) There has been since July  first,  nineteen  hundred  seventy,  a
    8  major  capital  improvement [required for the operation, preservation or
    9  maintenance of the structure. An adjustment under this subparagraph  (g)
   10  shall  be  in  an amount sufficient to amortize the cost of the improve-
   11  ments pursuant to this  subparagraph  (g)  over  a  seven-year  period];
   12  PROVIDED  THAT  THE COMMISSIONER FINDS THAT SUCH IMPROVEMENTS ARE DEEMED
   13  DEPRECIABLE UNDER THE INTERNAL REVENUE CODE AND  SUCH  IMPROVEMENTS  ARE
   14  REQUIRED  FOR  THE  OPERATION, PRESERVATION OR MAINTENANCE OF THE STRUC-
   15  TURE. THE INCREASE PERMITTED  FOR  SUCH  CAPITAL  IMPROVEMENT  SHALL  BE
   16  COLLECTED  AS A MONTHLY SURCHARGE TO THE MAXIMUM RENT. IT SHALL BE SEPA-
   17  RATELY DESIGNATED AND BILLED AS SUCH AND SHALL NOT BE COMPOUNDED BY  ANY
   18  OTHER  ADJUSTMENT  TO  THE MAXIMUM RENT. THE SURCHARGE ALLOCABLE TO EACH
   19  APARTMENT SHALL BE AN AMOUNT  EQUAL  TO  THE  COST  OF  THE  IMPROVEMENT
   20  DIVIDED BY  EIGHTY-FOUR, DIVIDED BY THE NUMBER OF ROOMS IN THE BUILDING,

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD00868-01-3
       A. 5373                             2

    1  AND  THEN  MULTIPLIED BY THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED
    2  THAT THE SURCHARGE ALLOCABLE TO ANY APARTMENT IN ANY ONE  YEAR  MAY  NOT
    3  EXCEED  AN  AMOUNT EQUAL TO SIX PERCENT OF THE MONTHLY RENT COLLECTED BY
    4  THE  OWNER  FOR  SUCH  APARTMENT  AS  SET FORTH IN THE SCHEDULE OF GROSS
    5  RENTS.  ANY EXCESS ABOVE SAID SIX PERCENT SHALL BE CARRIED  FORWARD  AND
    6  COLLECTED  IN FUTURE YEARS AS A FURTHER SURCHARGE NOT TO EXCEED AN ADDI-
    7  TIONAL SIX PERCENT IN ANY ONE YEAR  PERIOD  UNTIL  THE  TOTAL  SURCHARGE
    8  EQUALS  THE  AMOUNT IT WOULD HAVE BEEN IF THE AFOREMENTIONED SIX PERCENT
    9  LIMITATION DID NOT APPLY; or
   10    S 2. Subparagraph (k) of paragraph  1  of  subdivision  g  of  section
   11  26-405 of the administrative code of the city of New York, as amended by
   12  chapter 749 of the laws of 1990,  is amended to read as follows:
   13    (k)  The  landlord has incurred, since January first, nineteen hundred
   14  seventy, in connection with and in addition to a concurrent major  capi-
   15  tal  improvement  pursuant  to subparagraph (g) of this paragraph, other
   16  expenditures to improve, restore or preserve the quality of  the  struc-
   17  ture.  An  adjustment  under  this subparagraph shall be granted only if
   18  such improvements represent an expenditure equal to  at  least  ten  per
   19  centum of the total operating and maintenance expenses for the preceding
   20  year.  An adjustment under this subparagraph shall be in addition to any
   21  adjustment granted for the  concurrent  major  capital  improvement  and
   22  shall  be  [in an amount sufficient to amortize the cost of the improve-
   23  ments pursuant to this subparagraph over a seven-year    period]  IMPLE-
   24  MENTED IN THE SAME MANNER AS SUCH MAJOR CAPITAL IMPROVEMENT AS A FURTHER
   25  SURCHARGE TO THE MAXIMUM RENT.
   26    S 3. Paragraph 6 of subdivision c of section 26-511 of the administra-
   27  tive code of the city of New York, as amended by chapter 116 of the laws
   28  of 1997,  is amended to read as follows:
   29    (6)  provides  criteria whereby the commissioner may act upon applica-
   30  tions by owners for increases in  excess  of  the  level  of  fair  rent
   31  increase  established under this law provided, however, that such crite-
   32  ria shall provide [(a)] as to hardship applications, for a finding  that
   33  the level of fair rent increase is not sufficient to enable the owner to
   34  maintain  approximately  the same average annual net income (which shall
   35  be computed without regard to debt service, financing costs  or  manage-
   36  ment  fees)  for the three year period ending on or within six months of
   37  the date of an application pursuant to such criteria  as  compared  with
   38  annual  net income, which prevailed on the average over the period nine-
   39  teen hundred sixty-eight through nineteen hundred seventy,  or  for  the
   40  first three years of operation if the building was completed since nine-
   41  teen  hundred  sixty-eight  or  for the first three fiscal years after a
   42  transfer of title to a new owner provided the new owner can establish to
   43  the satisfaction of the commissioner that he or she  acquired  title  to
   44  the  building as a result of a bona fide sale of the entire building and
   45  that the new owner is unable to obtain requisite records for the  fiscal
   46  years  nineteen  hundred  sixty-eight  through  nineteen hundred seventy
   47  despite diligent efforts to obtain same from predecessors in  title  and
   48  further  provided that the new owner can provide financial data covering
   49  a minimum of six years under his or  her  continuous  and  uninterrupted
   50  operation  of  the building to meet the three year to three year compar-
   51  ative test periods herein provided[; and (b) as to  completed  building-
   52  wide  major  capital  improvements, for a finding that such improvements
   53  are deemed depreciable under the Internal Revenue Code and that the cost
   54  is to be amortized over a seven-year period, based  upon  cash  purchase
   55  price  exclusive  of  interest  or  service  charges].   Notwithstanding
   56  anything to the contrary contained herein, no hardship increase  granted
       A. 5373                             3

    1  pursuant  to this paragraph shall, when added to the annual gross rents,
    2  as determined by the commissioner, exceed the sum  of,  (i)  the  annual
    3  operating  expenses, (ii) an allowance for management services as deter-
    4  mined  by  the  commissioner,  (iii) actual annual mortgage debt service
    5  (interest and amortization) on its indebtedness to  a  lending  institu-
    6  tion,  an  insurance company, a retirement fund or welfare fund which is
    7  operated under the supervision of the banking or insurance laws  of  the
    8  state  of  New  York  or  the United States, and (iv) eight and one-half
    9  percent of that portion of the fair market value of the  property  which
   10  exceeds  the  unpaid  principal  amount  of  the  mortgage  indebtedness
   11  referred to in subparagraph (iii) of this paragraph. Fair  market  value
   12  for  the  purposes of this paragraph shall be six times the annual gross
   13  rent. The collection of any increase in  the  stabilized  rent  for  any
   14  apartment pursuant to this paragraph shall not exceed six percent in any
   15  year from the effective date of the order granting the increase over the
   16  rent  set  forth  in the schedule of gross rents, with collectability of
   17  any dollar excess above said sum to be spread forward in similar  incre-
   18  ments  and  added to the stabilized rent as established or set in future
   19  years;
   20    S 4. Subdivision c of section 26-511 of the administrative code of the
   21  city of New York is amended by adding two new paragraphs 6-b and 6-c  to
   22  read as follows:
   23    (6-B) PROVIDES CRITERIA WHEREBY THE COMMISSIONER MAY ACT UPON APPLICA-
   24  TION  BY  OWNERS  FOR  INCREASES  IN  EXCESS  OF  THE LEVEL OF FAIR RENT
   25  INCREASE ESTABLISHED UNDER THIS LAW PROVIDED, HOWEVER, THAT SUCH  CRITE-
   26  RIA  SHALL  PROVIDE AS TO COMPLETED BUILDING-WIDE MAJOR CAPITAL IMPROVE-
   27  MENTS, FOR A FINDING THAT SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER
   28  THE INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS  ARE  REQUIRED  FOR  THE
   29  OPERATION,  PRESERVATION  OR  MAINTENANCE OF THE STRUCTURE. THE INCREASE
   30  PERMITTED FOR SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS  A  MONTHLY
   31  SURCHARGE TO THE LEGAL REGULATED RENT. IT SHALL BE SEPARATELY DESIGNATED
   32  AND  BILLED AS SUCH AND SHALL NOT BE COMPOUNDED BY ANY ANNUAL ADJUSTMENT
   33  OF THE LEVEL OF FAIR RENT PROVIDED FOR UNDER SUBDIVISION  B  OF  SECTION
   34  26-510  OF THIS LAW.  THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE
   35  AN AMOUNT EQUAL TO THE COST OF THE IMPROVEMENT DIVIDED  BY  EIGHTY-FOUR,
   36  DIVIDED  BY  THE NUMBER OF ROOMS IN THE BUILDING, AND THEN MULTIPLIED BY
   37  THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
   38  CABLE TO ANY APARTMENT, IN ANY ONE YEAR MAY NOT EXCEED AN  AMOUNT  EQUAL
   39  TO  SIX  PERCENT  OF  THE  MONTHLY  RENT COLLECTED BY THE OWNER FOR SUCH
   40  APARTMENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE
   41  SAID SIX PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE  YEARS
   42  AS  A  FURTHER  SURCHARGE NOT TO EXCEED AN ADDITIONAL SIX PERCENT IN ANY
   43  ONE YEAR PERIOD UNTIL THE TOTAL SURCHARGE EQUALS  THE  AMOUNT  IT  WOULD
   44  HAVE BEEN IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY.
   45    (6-C)  COLLECTION  OF  SURCHARGES  IN EXCESS OF THE LEVEL OF FAIR RENT
   46  AUTHORIZED PURSUANT TO PARAGRAPH SIX-B OF THIS SUBDIVISION  SHALL  CEASE
   47  WHEN THE OWNER HAS RECOVERED THE COST OF THE MAJOR CAPITAL IMPROVEMENT.
   48    S 5. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
   49  576  of  the  laws of 1974, constituting the emergency tenant protection
   50  act of nineteen seventy-four, as amended by chapter 749 of the  laws  of
   51  1990, is amended to read as follows:
   52    (3)  (I)  COLLECTION  OF SURCHARGES IN ADDITION TO THE LEGAL REGULATED
   53  RENT AUTHORIZED PURSUANT TO SUBPARAGRAPH (II) OF  THIS  PARAGRAPH  SHALL
   54  CEASE  WHEN  THE  OWNER  HAS  RECOVERED  THE  COST  OF THE MAJOR CAPITAL
   55  IMPROVEMENT;
       A. 5373                             4

    1    (II) there has been since January first, nineteen hundred seventy-four
    2  a major capital improvement [required for the operation, preservation or
    3  maintenance of the structure.  An adjustment under this paragraph  shall
    4  be  in  an  amount  sufficient  to amortize the cost of the improvements
    5  pursuant  to this paragraph over a seven-year period]; PROVIDED THAT THE
    6  COMMISSIONER FINDS THAT SUCH IMPROVEMENTS ARE DEEMED  DEPRECIABLE  UNDER
    7  THE  INTERNAL  REVENUE  CODE  AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE
    8  OPERATION, PRESERVATION OR MAINTENANCE OF THE STRUCTURE.   THE  INCREASE
    9  PERMITTED  FOR  SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS A MONTHLY
   10  SURCHARGE TO THE LEGAL REGULATED RENT. IT SHALL BE SEPARATELY DESIGNATED
   11  AND BILLED AS SUCH AND SHALL  NOT  BE  COMPOUNDED  BY  ANY  ANNUAL  RENT
   12  ADJUSTMENT  AUTHORIZED  BY THE RENT GUIDELINES BOARD UNDER THIS ACT. THE
   13  SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE AN AMOUNT  EQUAL  TO  THE
   14  COST OF THE IMPROVEMENT DIVIDED BY EIGHTY-FOUR, DIVIDED BY THE NUMBER OF
   15  ROOMS  IN  THE  BUILDING,  AND THEN MULTIPLIED BY THE NUMBER OF ROOMS IN
   16  SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLOCABLE TO  ANY  APARTMENT
   17  IN  ANY  ONE  YEAR  MAY NOT EXCEED AN AMOUNT EQUAL TO SIX PERCENT OF THE
   18  MONTHLY RENT COLLECTED BY THE OWNER FOR SUCH APARTMENT AS SET  FORTH  IN
   19  THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID SIX PERCENT SHALL BE
   20  CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS A FURTHER SURCHARGE NOT
   21  TO  EXCEED  AN  ADDITIONAL  SIX PERCENT IN ANY ONE YEAR PERIOD UNTIL THE
   22  TOTAL SURCHARGE EQUALS THE AMOUNT IT WOULD HAVE BEEN  IF  THE  AFOREMEN-
   23  TIONED SIX PERCENT LIMITATION DID NOT APPLY, or
   24    S 6. The second undesignated paragraph of paragraph (a) of subdivision
   25  4  of  section  4  of  chapter 274 of the laws of 1946, constituting the
   26  emergency housing rent control law, as amended by section 25 of  part  B
   27  of chapter 97 of the laws of 2011, is amended to read as follows:
   28    No application for adjustment of maximum rent based upon a sales price
   29  valuation  shall  be filed by the landlord under this subparagraph prior
   30  to six months from the date of such sale of the property.  In  addition,
   31  no  adjustment  ordered  by  the  commission based upon such sales price
   32  valuation shall be effective prior to one year from  the  date  of  such
   33  sale.  Where,  however,  the assessed valuation of the land exceeds four
   34  times the assessed valuation of the buildings  thereon,  the  commission
   35  may determine a valuation of the property equal to five times the equal-
   36  ized  assessed  valuation  of  the  buildings,  for the purposes of this
   37  subparagraph. The commission may make a determination that the valuation
   38  of the property is an amount  different  from  such  equalized  assessed
   39  valuation  where  there  is  a  request for a reduction in such assessed
   40  valuation currently pending; or where there has been a reduction in  the
   41  assessed valuation for the year next preceding the effective date of the
   42  current  assessed  valuation  in effect at the time of the filing of the
   43  application. Net annual return shall be the amount by which  the  earned
   44  income  exceeds  the operating expenses of the property, excluding mort-
   45  gage interest and amortization, and excluding  allowances  for  obsoles-
   46  cence  and  reserves, but including an allowance for depreciation of two
   47  per centum of the value of the buildings exclusive of the land,  or  the
   48  amount  shown  for  depreciation of the buildings in the latest required
   49  federal income tax return, whichever is lower; provided,  however,  that
   50  (1)  no  allowance  for  depreciation of the buildings shall be included
   51  where the buildings have been fully depreciated for federal  income  tax
   52  purposes  or  on the books of the owner; or (2) the landlord who owns no
   53  more than four rental units within the state has not been fully  compen-
   54  sated  by  increases  in  rental income sufficient to offset unavoidable
   55  increases in property taxes, fuel, utilities, insurance and repairs  and
   56  maintenance, excluding mortgage interest and amortization, and excluding
       A. 5373                             5

    1  allowances  for  depreciation,  obsolescence  and  reserves,  which have
    2  occurred since the federal date determining the maximum rent or the date
    3  the property was acquired by the present owner, whichever is  later;  or
    4  (3) the landlord operates a hotel or rooming house or owns a cooperative
    5  apartment  and  has  not  been  fully compensated by increases in rental
    6  income from the controlled housing accommodations sufficient  to  offset
    7  unavoidable increases in property taxes and other costs as are allocable
    8  to  such controlled housing accommodations, including costs of operation
    9  of such hotel or rooming house,  but  excluding  mortgage  interest  and
   10  amortization,  and  excluding  allowances for depreciation, obsolescence
   11  and reserves, which have occurred since the federal date determining the
   12  maximum rent or the date the landlord commenced  the  operation  of  the
   13  property, whichever is later; or (4) the landlord and tenant voluntarily
   14  enter into a valid written lease in good faith with respect to any hous-
   15  ing  accommodation,  which lease provides for an increase in the maximum
   16  rent not in excess of fifteen per centum and for a term of not less than
   17  two years, except that where such lease  provides  for  an  increase  in
   18  excess  of  fifteen  per  centum,  the  increase  shall be automatically
   19  reduced to fifteen per centum; or (5) the landlord and tenant by  mutual
   20  voluntary  written agreement agree to a substantial increase or decrease
   21  in dwelling space or a change in the services, furniture, furnishings or
   22  equipment provided in the housing accommodations; provided that an owner
   23  shall be entitled to a rent increase where there has been a  substantial
   24  modification  or  increase  of  dwelling  space  or  an  increase in the
   25  services, or installation of new equipment or improvements or new furni-
   26  ture or furnishings provided in or to a tenant's housing  accommodation.
   27  The  permanent  increase  in  the  maximum rent for the affected housing
   28  accommodation shall be one-fortieth, in the  case  of  a  building  with
   29  thirty-five  or  fewer  housing  accommodations, or one-sixtieth, in the
   30  case of a building with more  than  thirty-five  housing  accommodations
   31  where  such  permanent increase takes effect on or after September twen-
   32  ty-fourth, two thousand eleven, of the total cost incurred by the  land-
   33  lord  in  providing  such  modification  or  increase in dwelling space,
   34  services, furniture, furnishings or equipment,  including  the  cost  of
   35  installation,  but  excluding  finance  charges provided further that an
   36  owner who is entitled to a rent increase pursuant to this  clause  shall
   37  not  be  entitled to a further rent increase based upon the installation
   38  of similar equipment, or new furniture or furnishings within the  useful
   39  life  of  such new equipment, or new furniture or furnishings. The owner
   40  shall give written notice to  the  commission  of  any  such  adjustment
   41  pursuant to this clause; or (6) there has been, since March first, nine-
   42  teen  hundred  fifty,  an  increase  in  the rental value of the housing
   43  accommodations as a result of a substantial rehabilitation of the build-
   44  ing or housing accommodation therein which materially adds to the  value
   45  of  the  property  or  appreciably prolongs its life, excluding ordinary
   46  repairs,  maintenance  and  replacements;  or  (7)  (I)  COLLECTION   OF
   47  SURCHARGES  TO THE MAXIMUM RENT AUTHORIZED PURSUANT TO ITEM (II) OF THIS
   48  CLAUSE SHALL CEASE WHEN THE OWNER HAS RECOVERED THE COST  OF  THE  MAJOR
   49  CAPITAL  IMPROVEMENT;  (II)  there  has been since March first, nineteen
   50  hundred fifty, a major capital improvement [required for the  operation,
   51  preservation or maintenance of the structure]; PROVIDED THAT THE COMMIS-
   52  SIONER  FINDS  THAT  SUCH  IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER THE
   53  INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE  OPERA-
   54  TION, PRESERVATION OR MAINTENANCE OF THE STRUCTURE. THE INCREASE PERMIT-
   55  TED  FOR  SUCH  CAPITAL  IMPROVEMENT  SHALL  BE  COLLECTED  AS A MONTHLY
   56  SURCHARGE TO THE MAXIMUM RENT. IT SHALL  BE  SEPARATELY  DESIGNATED  AND
       A. 5373                             6

    1  BILLED  AS  SUCH  AND SHALL NOT BE COMPOUNDED BY ANY OTHER ADJUSTMENT TO
    2  THE MAXIMUM RENT. THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE  AN
    3  AMOUNT  EQUAL  TO  THE  COST OF THE IMPROVEMENT DIVIDED BY  EIGHTY-FOUR,
    4  DIVIDED  BY  THE NUMBER OF ROOMS IN THE BUILDING, AND THEN MULTIPLIED BY
    5  THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
    6  CABLE TO ANY APARTMENT IN ANY ONE YEAR MAY NOT EXCEED AN AMOUNT EQUAL TO
    7  SIX PERCENT OF THE MONTHLY RENT COLLECTED BY THE OWNER FOR  SUCH  APART-
    8  MENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID
    9  SIX  PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS A
   10  FURTHER SURCHARGE NOT TO EXCEED AN ADDITIONAL SIX  PERCENT  IN  ANY  ONE
   11  YEAR  PERIOD  UNTIL  THE TOTAL SURCHARGE EQUALS THE AMOUNT IT WOULD HAVE
   12  BEEN IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY; or  (8)
   13  there  has been since March first, nineteen hundred fifty, in structures
   14  containing more than four  housing  accommodations,  other  improvements
   15  made  with  the  express consent of the tenants in occupancy of at least
   16  seventy-five per centum of the housing accommodations, provided,  howev-
   17  er, that no adjustment granted hereunder shall exceed fifteen per centum
   18  unless  the  tenants  have agreed to a higher percentage of increase, as
   19  herein provided; or (9) there has  been,  since  March  first,  nineteen
   20  hundred fifty, a subletting without written consent from the landlord or
   21  an  increase in the number of adult occupants who are not members of the
   22  immediate family of the tenant, and the landlord has  not  been  compen-
   23  sated  therefor  by  adjustment of the maximum rent by lease or order of
   24  the commission or pursuant to the federal act; or (10) the  presence  of
   25  unique  or  peculiar circumstances materially affecting the maximum rent
   26  has resulted in a maximum rent which is  substantially  lower  than  the
   27  rents  generally  prevailing  in the same area for substantially similar
   28  housing accommodations.
   29    S 7. This act shall take effect immediately; provided that the  amend-
   30  ments  to section 26-405 of the city rent and rehabilitation law made by
   31  sections one and two of this act shall remain in full force  and  effect
   32  only  so  long  as  the  public  emergency  requiring the regulation and
   33  control of residential rents and evictions  continues,  as  provided  in
   34  subdivision  3  of section 1 of the local emergency housing rent control
   35  act; and provided further that the amendments to section 26-511  of  the
   36  rent  stabilization  law of nineteen hundred sixty-nine made by sections
   37  three and four of this act shall expire on the same  date  as  such  law
   38  expires  and  shall  not  affect  the expiration of such law as provided
   39  under section 26-520 of such law, as from  time  to  time  amended;  and
   40  provided further that the amendment to section 6 of the emergency tenant
   41  protection act of nineteen seventy-four made by section five of this act
   42  shall  expire  on the same date as such act expires and shall not affect
   43  the expiration of such act as provided in section 17 of chapter  576  of
   44  the  laws  of  1974,  as from time to time amended; and further provided
   45  that the amendment to section 4 of the emergency  housing  rent  control
   46  law  made  by  section  six of this act shall expire on the same date as
   47  such law expires and shall not affect the  expiration  of  such  law  as
   48  provided  in  subdivision  2  of section 1 of chapter 274 of the laws of
   49  1946.
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