STATE OF NEW YORK
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456
2011-2012 Regular Sessions
IN SENATE(Prefiled)
January 5, 2011
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Introduced by Sens. KRUEGER, DUANE, HUNTLEY, STAVISKY -- read twice and
ordered printed, and when printed to be committed to the Committee on
Housing, Construction and Community Development
AN ACT to amend the private housing finance law, in relation to windfall
profits on the dissolution or first sale of rental companies and the
dissolution and/or reconstitution of mutual companies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 2 of section 35 of the private housing finance
2 law, as amended by chapter 229 of the laws of 1989, is amended to read
3 as follows:
4 2. A company aided by a loan made after May first, nineteen hundred
5 fifty-nine, may voluntarily be dissolved, sold and/or reconstituted
6 without the consent of the commissioner or of the supervising agency, as
7 the case may be, not less than twenty years after the occupancy date
8 upon the payment in full of the remaining balance of principal and
9 interest due and unpaid upon the mortgage or mortgages [and], of any and
10 all expenses incurred in effecting such voluntary dissolution and of a
11 transfer fee equal to seventy-five percent of the fair market value in
12 the case of dissolution or sales price on the first sale of a rental
13 project, or, in the case of a mutual company seventy-five percent of the
14 sales price on each first sale thereafter for market value by a selling
15 shareholder. The proceeds of the transfer fees are to be paid into a
16 fund held by the New York city housing development corporation and the
17 New York state housing finance agency for the following purposes:
18 (a) to continue to subsidize the development for as long as the
19 purchaser of a rental development remains in the Mitchell-Lama program;
20 (b) for the city or state to purchase the land and to lease the land
21 to the tenants and convert the project to a limited profit mutual compa-
22 ny, with a ninety-nine year lease;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01802-01-1
S. 456 2
1 (c) for repair loans at zero percent interest to fund necessary capi-
2 tal improvements for as long as the company remains in the Mitchell-Lama
3 program;
4 (d) for each year that the company remains as a limited profit compa-
5 ny, to forgive one-thirtieth of the principal of any repair loan each
6 year;
7 (e) for the subsidization of other limited profit housing companies;
8 and
9 (f) for the development of other affordable housing.
10 § 2. This act shall take effect immediately.
