Enacts the housing development fund company self-determination, preservation and affordability act to clarify certain provisions relating to the dissolution and reincorporation of housing development fund companies; provides for tax exemptions and abatements for housing development fund companies.
STATE OF NEW YORK
________________________________________________________________________
2707--A
2025-2026 Regular Sessions
IN ASSEMBLY
January 22, 2025
___________
Introduced by M. of A. TAYLOR, EPSTEIN, TAPIA, LEVENBERG -- read once
and referred to the Committee on Housing -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the private housing finance law, in relation to enacting
the housing development fund company self-determination, preservation
and affordability act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "housing development fund company self-determination, preservation
3 and affordability act".
4 § 2. Legislative findings and declarations. 1. In 1966, the Legisla-
5 ture enacted Article 11 of the private housing finance law. Article 11
6 authorized the development of rental and cooperative housing that is
7 subject to certain income restrictions. The type of income-restricted
8 housing is referred to as housing development fund companies (HDFCs).
9 2. Beginning in the early 1980s, New York city adopted the HDFC form
10 of housing cooperative as a means to divest itself of -- and revitalize
11 -- its tax-foreclosed multi-family housing stock. At the time the city
12 was experiencing large-scale abandonment of its private low and middle-
13 income multi-family housing stock. In response to this housing crisis,
14 the city determined to turn over the ownership and management of many
15 city-owned tax-foreclosed multifamily buildings to the existing tenants
16 in the form of HDFC co-ops.
17 3. Previously, the city sold at auction nearly all of its tax-forec-
18 losed multi-family property to private investors - and that traditional
19 approach to disposing of tax foreclosed property had led to an acceler-
20 ating cycle of housing disinvestment and abandonment. The city's HDFC
21 initiative was in the city's own interests: it enabled the city to avoid
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02813-03-5
A. 2707--A 2
1 the counterproductive private auction process and to return the build-
2 ings to the tax rolls.
3 4. Over the past four decades the city's HDFC initiative proved to be
4 one of New York's most enduring housing success stories. Tens of thou-
5 sands of resident-shareholders of HDFCs played an important role in the
6 stabilization and preservation of New York city's multi-family housing
7 stock in the period following the city's fiscal crisis of the 1970s and
8 1980s. The city's large-scale creation of HDFC co-ops was a major policy
9 innovation and was an important part of the city's response to the hous-
10 ing crisis of that era. Today, there are over 1,100 HDFC co-ops in New
11 York city.
12 5. All government and community stakeholders benefitted from the
13 large-scale creation of HDFCs. The city benefitted by reducing its enor-
14 mous portfolio of tax-foreclosed apartment buildings at a time when the
15 buildings were a substantial burden to the city and when there was
16 little in the way of a private market for these properties. The resi-
17 dents benefitted by the preservation and upgrading of their own build-
18 ings and by becoming homeowners for the first time. And the surrounding
19 communities benefitted by the stabilization of the neighborhood, the
20 upgrading of housing and by the transformation of a rental community
21 into a homeowning community.
22 6. When the city imposed regulatory controls on the city-sponsored
23 HDFCs, the regulatory controls placed on HDFCs were time-limited.
24 Consequently, the HDFCs that were created in the 1980s and 1990s have
25 regulatory controls that already have expired or will soon expire. For
26 this class of HDFCs, there is a great deal of uncertainty as to their
27 legal status and their financial future.
28 7. This legislation clarifies the legal status of HDFCs with expired
29 regulatory controls in a way that protects and promotes their autonomy
30 and self-governance while strengthening the inducements for these HDFCs
31 to voluntarily agree to continue to operate as affordable housing.
32 8. An important feature of city-sponsored HDFCs is the city's use of
33 its authority to enter into a "regulatory agreement" with the HDFC.
34 Under section 576 of the private housing finance law, either the state
35 or the municipal "supervisory agency" (i.e., HPD) may enter into a regu-
36 latory agreement with an HDFC if the agency advances public funds to the
37 HDFC. Under such section of the private housing finance law, every HDFC
38 regulatory agreement must provide that:
39 (1) Households must meet income eligibility guidelines, which are
40 defined by statute as six times the annual rent plus six percent of the
41 shareholder's "original investment" in the HDFC. See paragraph b of
42 subdivision 1 of section 576 of the private housing finance law.
43 (2) Profits must be used only for capital improvements or to reduce
44 rent/maintenance. Dividends cannot be paid to owners. See paragraphs c
45 and d of subdivision 1 of section 576 of the private housing finance
46 law.
47 (3) The property may not be sold or transferred without HPD approval
48 for so long as the regulatory agreement remains in effect and/or unless
49 and until any funds or mortgages owed to the city are paid in full. See
50 paragraph e of subdivision 1 of section 576 of the private housing
51 finance law.
52 (4) The HDFC may not be dissolved without HPD approval for so long as
53 the regulatory agreement remains in effect and/or unless and until any
54 funds or mortgages owed to the city are paid in full. See paragraph e of
55 subdivision 1 of section 576 of the private housing finance law.
A. 2707--A 3
1 9. Thus, under section 576 of the private housing finance law certain
2 key restrictions remains in effect only for so long as a regulatory
3 agreement remains in effect. Put differently, the city's authority to
4 impose section 576 restrictions (including restrictions on dissolution
5 of HDFCs and on the sale and disposition of HDFC property) is limited to
6 only those HDFCs that are subject to a regulatory agreement and does not
7 extend to HDFCs in which a regulatory agreement or mortgage is no longer
8 in effect.
9 10. The city applied its section 576 authority to HDFCs in two ways:
10 i.e. (1) some of the terms of the section 576 "regulatory agreement"
11 were incorporated into various HDFC incorporation documents and in the
12 deed conveying title to the property; and (2) a regulatory agreement was
13 incorporated into mortgage documents when the city made loans to HDFCs
14 to finance capital improvements. In each case the city imposed resale
15 restrictions that had a fixed term. At the inception of the HDFC program
16 in the early 1980s, city-sponsored resale restrictions imposed by the
17 sale documents expired in ten years. By the late 1980s, city-sponsored
18 resale restrictions imposed by the sale documents ran for 25 years.
19 Furthermore, resale restrictions that were made a part of city-sponsored
20 rehabilitation loans to HDFCs ran for the life of the loan -- i.e.,
21 usually 15 to 25 years.
22 11. Thus, the city used section 576 of the private housing finance law
23 as a means to impose additional terms and conditions (including resale
24 restrictions) on the operation of the HDFC for a fixed term following
25 the establishment of the housing cooperative or during the life of a
26 city-sponsored loan to the HDFC. For the vast majority of HDFCs, these
27 restrictions have expired.
28 12. There are presently over 1,100 HDFCs in New York city containing
29 approximately 25,000 apartments. Of these HDFCs, approximately 20
30 percent are subject to regulatory agreements. A substantial number of
31 non-regulated HDFCs date from the 1980s and 1990s. These older HDFCs are
32 no longer subject to city resale restrictions that expired after either
33 ten years or 25 years following the incorporation of the HDFCs.
34 13. For as long as a particular city-imposed resale restrictions
35 remained in effect, an HDFC is subject to a detailed scheme of regu-
36 lations imposed by the city pursuant to section 576 of the private hous-
37 ing finance law. In general, HPD resale restrictions govern such impor-
38 tant issues of HDFC governance as income limitations for purchasers,
39 succession rights, sublet rights, flip taxes, HPD consent as a precondi-
40 tion to the sale of an HDFC building and HPD consent to the dissolution
41 of an HDFC. Upon the expiration of the city-imposed restrictions, the
42 HDFC is no longer subject to these externally imposed regulations.
43 14. An HDFC with expired regulatory controls nevertheless remains
44 subject to Article 11 of the private housing finance law as well as to
45 various governing documents, such as its certificate of incorporation,
46 deed restrictions, proprietary lease and by-laws. Most importantly, an
47 HDFC is required to provide housing for "persons of low income," as
48 defined in paragraph a of subdivision 3 of section 573 of the private
49 housing finance law. However, once an HDFC regulatory agreement or other
50 HPD-imposed income restriction has expired, nothing in the private hous-
51 ing finance law expressly precludes these HDFC co-ops from converting to
52 a non-HDFC co-op by reincorporating as a conventional co-op (and thereby
53 opting out of the remaining statutory restrictions imposed by the
54 private housing finance law). That circumstance raised the possibility
55 that some HDFCs may opt-out of the HDFC statute and become market-rate
A. 2707--A 4
1 housing - which would represent a loss to the city's inventory of
2 affordable housing stock.
3 15. A city-established HDFC is eligible to receive a partial real
4 estate tax exemption granted by the city pursuant to section 577 of the
5 private housing finance law. Pursuant to this authority, the city in
6 1989 enacted a partial tax exemption for most city-sponsored HDFCs. The
7 tax exemption is generally referred to as the "Division of Alternative
8 Management Programs" tax exemption, or "DAMP tax exemption".
9 16. The tax exemption runs for forty years and will expire in 2029. A
10 condition of the DAMP tax exemption is that the HDFC remain an HDFC for
11 the duration of the tax exemption. Hence, an HDFC that opt-outs of the
12 HDFC statute and become market-rate housing would be required to forfeit
13 the DAMP tax exemption.
14 17. The city in 2017 proposed local legislation that would revoke the
15 DAMP tax exemption from any HDFC that declined to sign a new regulatory
16 agreement with HPD. The proposed new regulatory agreement would contain
17 many provisions that would largely deprive HDFCs of autonomy and self-
18 determination, including the imposition of external fiscal monitors paid
19 for by HDFC income, new restriction on apartment sales and subletting,
20 and limitations on the assets and other real property owned by HDFC
21 shareholders. By 2019 the city abandoned the proposed legislation in the
22 face of widespread opposition by HDFC community groups and other stake-
23 holders.
24 18. Also in 2017, the city proposed new state legislation that would
25 re-regulate HDFCs and that would change the law to ensure that all HDFCs
26 remain subject to affordability controls in perpetuity. See S2543 (2017)
27 (proposed amendment to the private housing finance law). As stated in
28 the city's memorandum in support of S2543:
29 "(T)here is a great need for an amendment to clarify that the corpo-
30 rate purpose of an HDFC -- to provide affordable housing to persons and
31 families of low income -- is perpetual in duration. Absent the checks
32 and balances provided by the (proposed amendment to private housing
33 finance law, which would subject HDFCs for the time to the requirements
34 of the not-for-profit corporation law), there may be a great loss of
35 affordable housing."
36 19. Thus, the city expressly acknowledged that, under existing law,
37 HDFCs with expired regulatory agreements have the option of remaining as
38 an HDFC or, in the alternative, the option of converting to another form
39 of housing cooperative without affordability controls. S2453 was
40 intended to eliminate the second option. Ultimately, S2453 was not
41 enacted and the statutory law governing HDFCs remains unchanged.
42 20. Contrary to the city's 2017 statement, the New York Attorney
43 General issued an opinion in 2015 to the effect that HDFC cooperatives
44 could never opt-out of the PHFL and that they were subject to the
45 perpetual regulation of the HPD Commissioner. See New York Attorney
46 General, "Guidance on Housing Development Fund Corporations Seeking to
47 Transfer or Sell Property for, or Otherwise Convert Property to Market-
48 Rate Use" (hereafter "Guidance"). HPD joined in the Guidance. The Attor-
49 ney General reached this conclusion based on their determination that
50 the statutory term "amendment" - as used in subdivision 5 of section 573
51 of the private housing finance law - encompassed and implied the commis-
52 sioner's additional authority to consent to the dissolution of an HDFC.
53 The Attorney General's Guidance is incorrect as a matter of law, in that
54 it misconstrues the plain text of the HDFC statute as well as ignores
55 the distinct treatment of the concepts of "amendment" and "dissolution"
A. 2707--A 5
1 in other New York corporate law settings, including the business corpo-
2 ration law.
3 21. Consistent with the city's 2017 statement, HDFCs always have had
4 the right under the private housing finance law -- and continue to have
5 the right under the private housing finance law -- to dissolve and rein-
6 corporate under the business corporation law or other applicable law,
7 provided that the housing development fund company: (1) was formerly
8 subject to a regulatory agreement but such regulatory agreement has
9 expired and/or was formerly subject to contractual restrictions imple-
10 menting the requirements of section 576 of the private housing finance
11 law but that such contractual restrictions have expired; and (2) had
12 formerly received a tax exemption under section 577 of the private hous-
13 ing finance law but such tax exemption either has expired or is other-
14 wise no longer being received.
15 22. This legislation squarely addresses the legal uncertainty that
16 threatens the future of many city-sponsored HDFCs. More particularly,
17 this legislation has three overriding goals: (1) to protect and promote
18 the self-determination of HDFC co-ops; (2) to provide strong incentives
19 for HDFC co-ops with expired controls to agree to remain as affordable
20 housing; and (3) to ensure that the HDFC co-ops that agree to remain as
21 affordable housing are in sound condition and are economically self-suf-
22 ficient. These three overriding objectives are complementary.
23 23. The current HDFC tax exemption for most city-sponsored HDFCs
24 co-ops is scheduled to expire in 2029. Already, many financial insti-
25 tutions have indicated a reluctance to lend to HDFCs in light of the
26 financial uncertainty associated with the scheduled expiration of the
27 HDFC tax exemption in five years. This legislation will eliminate this
28 uncertainty by providing a permanent tax incentive for HDFCs.
29 24. Currently, HDFC co-ops receive a partial tax exemption - known as
30 "the DAMP tax benefit". The DAMP tax benefit takes the form of a cap on
31 assessed valuation per dwelling unit - currently $12,542. As previously
32 noted, this legislation removes the sunsetting of the DAMP tax exemption
33 and makes the tax exemption permanent. Furthermore, the legislation
34 allows HDFC co-ops to receive the greater of the DAMP tax exemption or
35 twice the tax abatement that most market-rate co-ops presently currently
36 receive under section 467-a of the real property tax law (but which HDFC
37 co-ops presently are ineligible to receive). This increased tax benefit
38 to HDFCs is a recognition that income-restricted HDFC co-ops are enti-
39 tled to greater benefits than market-rate co-ops. This increased tax
40 benefit is a vital means to promote and protect housing affordability
41 and to provide financial stability to HDFCs. The benefit also is
42 intended as an inducement for current HDFC co-ops (with expired regula-
43 tory controls) to make a long-term commitment to remain as income-res-
44 tricted HDFCs - rather than exercising their right to reincorporate as
45 another form of housing cooperative that is not subject to income
46 restrictions.
47 25. The fact that market-rate co-ops are eligible to receive a tax
48 abatement under section 467-a of the real property tax law, but that
49 HDFC co-ops presently are ineligible to receive any such tax abatement,
50 is an inequity that is corrected by this legislation. As stated above,
51 the real property tax law section 467-a tax abatement is received by
52 most housing cooperatives in New York City other than HDFCs. This tax
53 abatement contains no income restrictions or similar eligibility
54 requirements. A luxury co-op on Park Avenue is eligible for a conven-
55 tional co-op tax abatement. Currently, a conventional co-op that is
56 assessed at $50,000 per unit or less is eligible for a tax abatement of
A. 2707--A 6
1 28.1 percent. A conventional co-op that is assessed above $60,000 per
2 unit - without any upper limit to assessed value - is subject to a 17.5
3 percent tax abatement. However, under current law, HDFCs that receive
4 the DAMP tax exemption are not eligible to receive either the 28.1
5 percent real property tax law tax abatement or the 19 percent real prop-
6 erty tax law tax abatement. See paragraph (b) of subdivision 2 of
7 section 467-a of the real property tax law which provides that housing
8 cooperatives that receive most other real estate tax incentives are not
9 eligible to receive the conventional co-op tax abatement. This places
10 many income-restricted HDFCs co-ops in the anomalous position of receiv-
11 ing less of a tax benefit than a conventional co-op without any income
12 restrictions whatsoever.
13 26. Although HDFCs do receive the DAMP tax exemption in lieu of the
14 conventional co-op tax abatement, the application of the DAMP tax
15 exemption to many HDFC co-ops is not nearly as valuable as would be the
16 application of the real property tax law section 467-a tax abatement.
17 This is so because the real property tax law section 467-a tax abatement
18 provides a dollar-for-dollar reduction in real estate tax liability. By
19 contrast, the DAMP tax exemption merely provides a cap on assessed valu-
20 ation, and thereby a cap on the resulting real estate tax liability. If
21 an HDFC's assessment is already below the DAMP "cap," then the HDFC
22 receives no tax benefit at all. Hence, many HDFCs located in low-income
23 neighborhoods receive no tax benefit whatsoever. This is manifestly
24 unfair.
25 27. This legislation remedies this anomaly by providing that HDFC
26 co-ops are entitled to either the benefits of a conventional co-op tax
27 abatement and the DAMP tax exemption. As a matter of fairness and equi-
28 ty, an HDFC income-restricted co-op should receive at least the tax
29 benefit that a market-rate co-op receives. This legislation goes further
30 and provides that HDFC co-ops are entitled to the greater of twice the
31 conventional co-op tax abatement or the DAMP tax exemption. As previous-
32 ly stated, this increased benefit is a recognition that HDFC co-ops are
33 entitled to greater benefits than market-rate co-ops as a vital means to
34 promote and protect housing affordability in New York City and as a
35 means to provide financial stability to HDFCs.
36 28. This legislation also establishes a mechanism to ensure that HDFCs
37 that receive the tax benefit comply with the new affordability require-
38 ments. As a condition of the continuing receipt of the tax benefit, each
39 HDFC is required to file an annual certification stating that it has
40 complied with the affordability requirements. HPD is authorized to
41 review and audit the sales records of the HDFC in order to ensure
42 compliance with these requirements. Furthermore, HPD has the right to
43 suspend or revoke the tax exemption and tax abatement if HPD determines
44 that HDFC has willfully not complied with the affordability require-
45 ments.
46 29. For the vast majority of HDFC co-ops, the proposed enhanced real
47 estate tax benefit -- together with the availability of below-market
48 interest financing available through HPD -- would be sufficient to
49 ensure both affordability and fiscal stability. However, for perhaps 10
50 to 20 percent of HDFCs -- which are in fair to poor financial condition
51 - something more is needed. In recognition of this special need of
52 economically distressed HDFCs, the legislation extends the authority of
53 the city of New York to offer special tax relief to HDFC co-ops that are
54 in severe fiscal distress and that are in danger of tax foreclosure by
55 reason of unpaid real estate taxes. Such tax relief is conditioned on
56 the HDFC co-op agreeing to enter into a special regulatory agreement in
A. 2707--A 7
1 which the city exercises appropriate oversight and monitoring of the
2 HDFC. Current legislation was enacted in 2002 and authorized tax
3 forgiveness only for HDFCs that "(as of) January 1, 2002 had outstanding
4 municipal real estate taxes relating to any period prior to January 1,
5 2001." This baseline year for tax forgiveness (i.e., tax arrears as of
6 2001) has never been updated to a more current tax year. The legislation
7 updates the baseline year so that the city has the flexibility to offer
8 tax forgiveness (in appropriate cases and subject to strict controls set
9 forth in current law) for HDFC co-ops that are at risk of tax foreclo-
10 sure. In this way an economically distressed HDFC co-op is saved from
11 tax foreclosure, and may thereby provide sustainable and affordable
12 housing for years to come. This is critically important - not just for
13 the HDFC shareholders themselves - but also for neighborhood stability.
14 30. In summary, this legislation provides a much needed permanent tax
15 incentive for HDFCs -- as well as targeted tax relief for economically
16 distressed HDFCs. The permanent tax benefit will eliminate the current
17 uncertainty surrounding the expiration of the DAMP tax exemption in 2029
18 - and will thereby ease the availability of mortgage financing for
19 HDFCs. Furthermore, the permanent tax benefit will serve as a strong
20 incentive for HDFCs with expired regulatory controls to affirmatively
21 choose to remain as affordable HDFC housing subject to income
22 restrictions -- consistent with democratic principles of self-gover-
23 nance. This approach is a matter of basic fairness and justice; is
24 consistent with the promises given to HDFCs over the past thirty years;
25 and is in full accord with how all other government-sponsored private
26 housing under the private housing finance law is treated (such as Mitc-
27 hell-Lama housing and Article V redevelopment companies). Most impor-
28 tantly, this approach will ensure the long-term economic viability of
29 affordable HDFC co-ops.
30 § 3. Section 576 of the private housing finance law is amended by
31 adding a new subdivision 4 to read as follows:
32 4. A housing development fund company that is no longer subject either
33 to a regulatory agreement or to deed restrictions entered into with the
34 commissioner or supervisory agency shall continue to be subject to the
35 oversight of the commissioner or supervisory agency, subject to the
36 limitation set forth in paragraph (d) of subdivision one of section five
37 hundred seventy-seven of this article, provided that the housing devel-
38 opment fund company continues to elect to receive a tax exemption and/or
39 tax abatement pursuant to section five hundred seventy-seven of this
40 article. If such housing development fund company elects not to receive
41 a tax exemption and/or tax abatement pursuant to such section, then it
42 shall cease to be subject to the regulation and oversight of the commis-
43 sioner or supervisory agency.
44 § 4. Subdivision 1 of section 577 of the private housing finance law,
45 as amended by chapter 658 of the laws of 1967, paragraph (a) as amended
46 by chapter 428 of the laws of 1980, paragraph (c) as added by chapter
47 494 of the laws of 1995, and paragraph (d) as added by chapter 73 of the
48 laws of 2009, is amended to read as follows:
49 1. (a) The local legislative body of any municipality in which a
50 project of a housing development fund company is or is to be located may
51 exempt and abate the real property in such project from local and munic-
52 ipal taxes including school taxes, other than assessments for local
53 improvements, to the extent of all or part of the value of the property
54 included in the completed project. The tax exemption and tax abatement
55 shall operate and continue for [such period as may be provided by such
56 local legislative body, but in no event for a period of more than forty
A. 2707--A 8
1 years, commencing] so long as a housing development fund company remains
2 in compliance with the requirements of this section, and shall commence
3 in each instance from the date on which the benefits of such exemption
4 first became available and effective. The tax exemption and tax abate-
5 ment shall be applied to:
6 (i) newly created housing development fund companies that are subject
7 to regulatory agreement and/or contractual or deed restrictions imposed
8 by the commissioner or supervisory agency;
9 (ii) housing development fund companies that are presently subject to
10 a regulatory agreement and/or contractual or deed restrictions imposed
11 by the commissioner or supervisory agency; and
12 (iii) housing development fund companies that are not presently
13 subject to a regulatory agreement and are not presently subject to
14 contractual or deed restrictions imposed by the commissioner or supervi-
15 sory agency but that agree to the conditions of the tax exemption and
16 tax abatement as hereinafter described in paragraph (b) of this subdivi-
17 sion.
18 (b) In order for a housing development fund company described in
19 subparagraph (iii) of paragraph (a) of this subdivision to be eligible
20 for a tax exemption and tax abatement pursuant to this section, such
21 company shall be required, for so long as it receives such tax exemption
22 and tax abatement, to not approve a sale of an apartment unless the
23 purchaser of the apartment provides satisfactory proof of income and
24 unless the income of the purchaser is no greater than the income limita-
25 tion specified herein. Such income limitation shall be, at the election
26 of the housing development fund company, either (i) the apartment resale
27 requirement of paragraph b of subdivision one of section five hundred
28 seventy-six of this article; or (ii) a requirement that the income of a
29 purchaser of an apartment not exceed one hundred sixty-five percent of
30 the area median income, as determined from time to time by the United
31 States department of housing and urban development. As a condition of
32 the continuing receipt of such tax exemption and tax abatement, the
33 housing development fund company shall file an annual certification with
34 the commissioner or supervisory agency that the company has complied
35 with the requirements of this section. Such certification shall be
36 limited to a listing of apartments sold or transferred in the prior
37 twelve months and a statement that the income of the purchaser or trans-
38 feree of the apartment complies with the income requirement of this
39 paragraph, except that a transferee who is a member of the transferor's
40 family or household need not comply with such requirement.
41 (c) (i) The commissioner or supervisory agency may review and audit
42 the sales records of a housing development fund company in order to
43 ensure compliance with the requirements of this section. The commission-
44 er or supervisory agency shall have the authority to suspend or revoke
45 the tax exemption and tax abatement applicable to any housing develop-
46 ment fund company, in proportion to the percentage of dwelling units at
47 a housing development fund corporation not in compliance with this
48 section, if the commissioner determines that the company has willfully
49 violated the provisions of this section, so long as the housing develop-
50 ment fund company is provided with prior written notification as to each
51 specific instance of noncompliance and to which dwelling unit such non-
52 compliance is alleged.
53 (ii) A housing development fund company shall have the right to rebut
54 allegations of a willful violation of this section, and also to charge
55 and collect additional monies from any shareholder, including successors
56 and assigns, found by the commissioner or supervisory agency to have
A. 2707--A 9
1 willfully not complied with the requirements of this section so as to
2 recover expenses for all losses of tax exemptions and tax abatements and
3 so as to recover all expenses associated with responding to such allega-
4 tions by the commissioner or supervisory agency.
5 (iii) Any annual certification submitted pursuant to this section that
6 has been accepted for filing and that has not been subject to a suspen-
7 sion or revocation action by the commissioner or supervisory agency for
8 a period of five years shall be deemed correct and shall not be subject
9 to further audit or review by the commissioner or supervisory agency.
10 (d) The conditions set forth in paragraph (b) of this subdivision
11 shall be the sole and exclusive conditions governing the eligibility of
12 a housing development fund company described in subparagraph (iii) of
13 paragraph (a) of this subdivision for receipt of the tax exemption and
14 tax abatement authorized in paragraph (e) of this subdivision.
15 (e) For each eligible housing development fund company, the annual
16 amount of the tax exemption and tax abatement authorized pursuant to
17 this section shall be the greater of:
18 (i) twelve thousand five hundred forty-two dollars, equivalent to the
19 cap on assessed value per apartment of fifty thousand dollars in the two
20 thousand twenty-four tax year, and which shall increase by two and a
21 half percent per year in each subsequent tax year; or
22 (ii) the net reduction in real estate taxes resulting from two hundred
23 percent of the tax abatement for housing cooperatives authorized by
24 section four hundred sixty-seven-a of the real property tax law.
25 (f) Where a municipality acts on behalf of another taxing jurisdiction
26 in assessing real property for the purpose of taxation, or in levying
27 taxes therefor, the action of the local legislative body of such munici-
28 pality in granting such tax exemption shall have the effect of exempting
29 the real property in such project from local and municipal taxes includ-
30 ing school taxes, other than assessments for local improvements, levied
31 by or in behalf of both such taxing jurisdictions.
32 [(c)] (g) The local legislative body of any municipality may grant an
33 exemption under paragraph (a) of this subdivision to the real property
34 of a project of any entity to which it is authorized to make a loan
35 pursuant to section five hundred seventy-six-c of this article.
36 [(d)] (h) In a city having a population of one million or more, within
37 one hundred twenty days following receipt of a written submission from
38 the supervising agency requesting a tax exemption pursuant to paragraph
39 (a) of this subdivision for the real property containing the project of
40 a housing development fund company, the local legislative body shall
41 approve or disapprove by resolution the requested tax exemption. If the
42 local legislative body fails to take such action within one hundred
43 twenty days following receipt of such written submission from such
44 supervising agency, then the tax exemption requested by the supervising
45 agency shall be deemed approved pursuant to paragraph (a) of this subdi-
46 vision.
47 § 5. Paragraph (b) of subdivision 1 of section 577-b of the private
48 housing finance law, as amended by chapter 225 of the laws of 2004, is
49 amended to read as follows:
50 (b) on January first, two thousand [two] twenty-four, had outstanding
51 municipal real estate taxes relating to any period prior to January
52 first, two thousand [one] twenty-three.
53 § 6. This act shall take effect on the first of January next succeed-
54 ing the date on which it shall have become a law.
