Add SS25-a & 36-b, amd SS35, 13 & 36, Priv Hous Fin L; add S93-a, St Fin L
Authorizes the voluntary dissolution of Mitchell-Lama coops, directs that a portion of the sale price of dissolved coops be paid to the state, authorizes the reassessment of such properties for tax purposes, and allows the transfer of shares in such properties to be subject to taxation; creates the middle income housing fund.
STATE OF NEW YORK
________________________________________________________________________
10473
IN ASSEMBLY
May 29, 2012
___________
Introduced by M. of A. KELLNER -- read once and referred to the Commit-
tee on Housing
AN ACT to amend the private housing finance law and the state finance
law, in relation to providing for the automatic dissolution of Mitc-
hell-Lama cooperative housing
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The private housing finance law is amended by adding a new
2 section 35-a to read as follows:
3 § 35-a. Dissolution of a mutual company. 1. A mutual company shall
4 automatically be dissolved, without consent of the commissioner or of
5 the supervising agency, as the case may be, not less than thirty years
6 after the occupancy date but within one year following such thirtieth
7 year or within one year of the effective date of this section, whichever
8 is later. Such mutual company shall be required to pay any and all
9 expenses incurred in effecting such dissolution.
10 2. Notwithstanding subdivision one of this section, no such dissol-
11 ution shall occur if a majority of the owners of the capital stock of
12 the company vote to remain subject to the provisions of this article.
13 3. Upon dissolution, such mutual company may elect to (a) pay in full
14 the remaining balance of principal and interest due and unpaid upon the
15 mortgage or mortgages; or (b) continue to pay the remaining balance of
16 principal and interest due and unpaid upon the mortgage or mortgages in
17 accordance with the original terms of such mortgage or mortgages,
18 notwithstanding the dissolution. If the terms of a mortgage, and note or
19 bond secured thereby, made pursuant to this article, shall require
20 modification in order to comply with the provisions of this section, the
21 mutual company and the mortgagee or mortgagees shall be required to
22 renegotiate and agree to such modified terms within one year of the
23 effective date of the mutual company's dissolution pursuant to subdivi-
24 sion one of this section. If the parties are unable to agree, the modi-
25 fied terms shall be determined by binding arbitration.
26 4. Upon such dissolution, title to the project may be conveyed in fee
27 to the owner or owners of its capital stock or to any corporation desig-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15224-01-2
A. 10473 2
1 nated by it or them for the purpose, or the company may be reconstituted
2 pursuant to appropriate laws relating to the formation and conduct of
3 corporations, provided, however, that prior to any such dissolution and
4 conveyance or reconstitution, payment shall be made of all current oper-
5 ating expenses, taxes, indebtedness and all accrued interest thereon and
6 the par value of and accrued dividends on the outstanding stock of such
7 company.
8 5. Conveyance of such land shall be subject to covenants and
9 restrictions of record. If the covenants or restrictions of record shall
10 require modification in order to comply with the provisions of this
11 section, the mutual company and any other interested party or parties
12 shall be required to renegotiate and agree to such modified terms within
13 one year of the effective date of the mutual company's dissolution
14 pursuant to subdivision one of this section. If the parties are unable
15 to agree, the modified terms shall be determined by binding arbitration.
16 6. After such dissolution and conveyance, or such reconstitution, the
17 provisions of this article shall become and be inapplicable to any such
18 project and its owner or owners and any tax exemption granted with
19 respect to such project pursuant to section thirty-three of this article
20 shall cease and terminate.
21 § 2. Subdivision 2 of section 35 of the private housing finance law,
22 as amended by chapter 229 of the laws of 1989, is amended to read as
23 follows:
24 2. [A] Except as provided by section thirty-five-a of this article, a
25 company aided by a loan made after May first, nineteen hundred fifty-
26 nine, may voluntarily be dissolved, without the consent of the commis-
27 sioner or of the supervising agency, as the case may be, not less than
28 twenty years after the occupancy date upon the payment in full of the
29 remaining balance of principal and interest due and unpaid upon the
30 mortgage or mortgages and of any and all expenses incurred in effecting
31 such voluntary dissolution.
32 § 3. Subdivision 6 of section 13 of the private housing finance law,
33 as amended by chapter 628 of the laws of 1962, is amended to read as
34 follows:
35 6. Its duration, which shall be: (a) not less than the period for
36 which the loans contracted for under this article and the interest ther-
37 eon remain unpaid in whole or in part; and (b) not less than the period
38 for which tax exemption is granted pursuant to section thirty-three of
39 this article; and (c) in any event not less than thirty-five years from
40 the date of occupancy of any project, except as may be provided in
41 [sections] section thirty-five [and], thirty-five-a or thirty-six of
42 this article.
43 § 4. Subdivision 1 of section 36 of the private housing finance law,
44 as amended by chapter 428 of the laws of 1964, is amended to read as
45 follows:
46 1. Except as otherwise provided in this article and prior to the
47 expiration of thirty-five years from the date of occupancy, a project,
48 other than a project aided by a loan made after May first, nineteen
49 hundred fifty-nine, shall not be sold except to a company organized
50 pursuant to the provisions of this article; prior to the expiration of
51 twenty years from the date of occupancy, a project aided by a loan made
52 after May first, nineteen hundred fifty-nine, shall not be sold except
53 to a company organized pursuant to the provisions of this article.
54 Notwithstanding the foregoing, a mutual company may not, prior to the
55 expiration of thirty years from the date of occupancy, sell a project
56 aided by a loan made after May first, nineteen hundred fifty-nine except
A. 10473 3
1 to a company organized pursuant to the provisions of this article. Such
2 successor company shall acquire such project subject to all the
3 provisions of the loan and mortgage contract and the provisions of this
4 article, and shall be entitled to all the benefits provided in such
5 contract or granted under this article, and a company so conveying all
6 its projects may be dissolved with the consent of the commissioner or
7 the supervising agency, as the case may be.
8 § 5. The private housing finance law is amended by adding a new
9 section 36-b to read as follows:
10 § 36-b. Initial sale after dissolution. 1. Upon the initial sale of a
11 property owned by a mutual company which dissolves pursuant to section
12 thirty-five-a of this article, ten percent of the net sale price, as
13 calculated after the stockholders of the dissolving company receive the
14 par value of their stock with accrued and unpaid dividends upon such
15 stock, shall be paid to the middle income housing fund of the state, as
16 defined in section ninety-three-a of the state finance law.
17 2. Upon the initial sale of a property owned by a mutual company which
18 dissolved pursuant to section thirty-five-a of this article, the full
19 value of the property shall be considered for purposes of determining
20 real estate tax assessment pursuant to the provisions of subchapter one
21 of chapter two of title eleven of the administrative code of the city of
22 New York. Upon first payment of taxes by the purchaser, an amount equal
23 to the difference between the amount of taxes assessed for the year
24 immediately prior to the dissolution and the amount of taxes owed after
25 dissolution shall be paid by the New York city department of finance to
26 the middle income housing fund of the state, as defined in section nine-
27 ty-three-a of the state finance law.
28 3. Upon the initial sale of a property owned by a mutual company which
29 dissolves pursuant to section thirty-five-a of this article, the sale of
30 the stock of the stockholders of the dissolving company shall be subject
31 to taxation pursuant to article twelve of the tax law. All monies
32 collected by the department of taxation and finance pursuant to the
33 provisions of this subdivision shall be paid by the commissioner of
34 taxation and finance to the middle income housing fund of the state, as
35 defined in section ninety-three-a of the state finance law.
36 § 6. The state finance law is amended by adding a new section 93-a to
37 read as follows:
38 § 93-a. Middle income housing fund. 1. There is hereby established in
39 the joint custody of the state comptroller and the commissioner of taxa-
40 tion and finance a special fund to be known as the "middle income hous-
41 ing fund".
42 2. Such fund shall consist of all revenues received pursuant to an
43 appropriation by the legislature, the moneys transferred thereto pursu-
44 ant to section thirty-six-b of the private housing finance law and all
45 other moneys appropriated, credited or transferred thereto from any
46 other fund or source pursuant to law. Nothing contained in this section
47 shall prevent the state from receiving grants, gifts or bequests for the
48 purposes of the fund according to law.
49 3. Expenditures pursuant to appropriations may be made from the middle
50 income housing fund for construction, reconstruction and improvements
51 for middle income families and individuals, including the acquisition of
52 land, the acquisition or replacement of equipment, the preparation and
53 review of plans and specifications including engineering and other
54 services, field surveys and sub-surface investigations incidental there-
55 to, the payment by the state, as an advance of the part or share of the
56 cost of any project, improvement or work heretofore or hereafter author-
A. 10473 4
1 ized by an appropriation act. The comptroller is hereby authorized to
2 accept and receive amounts of money equal to the amounts of money
3 expended by the state pursuant to any such advance from any other capi-
4 tal projects fund appropriation and to deposit the same to the credit of
5 the middle income housing fund or, in the event the middle income hous-
6 ing fund expenditure has been reimbursed from the proceeds of the sale
7 of state bonds, to the credit of the state fund or sub-fund.
8 § 7. This act shall take effect immediately and shall apply to mutual
9 companies in existence and which have not initiated voluntary dissol-
10 ution on or before such date.
