senate Bill S444

Provides that upon sale of a limited-profit housing company project, reserve and surplus funds must be held in escrow and dedicated to major capital improvements

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jan / 2011
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 18 / Mar / 2011
    • NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
  • 13 / Apr / 2011
    • DEFEATED IN HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 04 / Jan / 2012
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT

Summary

Provides that upon sale or other conveyance of a limited-profit housing company project to an entity other than a new limited-profit housing company, reserve and surplus funds must be held in escrow by the new owner and dedicated solely to defraying the costs of major capital improvements; further provides that no rental may be increased to cover the cost of a major capital improvement until such reserve and surplus funds have been exhausted.

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Bill Details

See Assembly Version of this Bill:
A1853
Versions:
S444
Legislative Cycle:
2011-2012
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Private Housing Finance Law
Laws Affected:
Add ยง36-b, Priv Hous Fin L
Versions Introduced in Previous Legislative Cycles:
2009-2010: S3850, A1287
2007-2008: A2599

Votes

2
4
2
Aye
4
Nay
0
aye with reservations
0
absent
2
excused
0
abstained
show Housing, Construction and Community Development committee vote details
aye (2)
excused (2)

Sponsor Memo

BILL NUMBER:S444

TITLE OF BILL:

An act
to amend the private housing finance law, in relation to the sale of
limited-profit housing projects

PURPOSE OR GENERAL IDEA OF BILL:

This bill provides that upon sale of a limited-profit housing company
project, reserve and surplus funds must be held in escrow and dedicated
to major capital improvements.

SUMMARY OF SPECIFIC PROVISIONS:

The bill amends the Private Housing Finance Law (PHFL) by adding a new
section 36-b. That new section provides that if a limited profit housing
company incorporated under Article II of the PHFL sells a project to any
entity other than a limited-profit housing company, then all reserve and
surplus funds transferred to the new owner must be held in escrow for
the purpose of making major capital improvements to the project. The
bill further provides that the new owner may not increase rents or other
charges, based on new capital improvements, until after the reserve and
surplus funds held in escrow have been exhausted.

JUSTIFICATION:

The Mitchell-Lama program was established to create affordable housing
and guarantee developer profits of 6% on investments. In the event of
buyouts by owners of Mitchell-Lama developments, owners of limited
profit housing companies might transfer reserve or surplus monies to the
private sector, and those funds could - without the provisions contained
in this bill- be used in a manner contrary to the spirit and purpose of
the Mitchell-Lama program and the law creating it.

In order to ensure that monies which rightfully belong to residents in
limited profit housing companies are used to improve those buildings,
this bill would require that reserve or surplus funds be placed in an
escrow account if a housing company opts to buyout of the Mitchell-Lama
program, and limits the purpose for which the funds held in escrow may
be used.

PRIOR LEGISLATIVE HISTORY:

2006: S.7464
2007-08: S.3406
2009-10: S.3850/A.1287

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:


This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.

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

                                   444

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sens.  KRUEGER, DUANE, HUNTLEY -- 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 the sale
  of limited-profit housing projects

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

  Section  1. The private housing finance law is amended by adding a new
section 36-b to read as follows:
  S 36-B. SALE OR  OTHER  CONVEYANCE  OF  PROJECT.  NOTWITHSTANDING  ANY
INCONSISTENT  PROVISION  OF  LAW, UPON THE SALE OR OTHER CONVEYANCE OF A
PROJECT BY A COMPANY TO ANY ENTITY OTHER THAN A COMPANY,  THE  FOLLOWING
REQUIREMENTS SHALL APPLY.
  1. ALL RESERVE AND SURPLUS FUNDS TRANSFERRED BY THE COMPANY TO THE NEW
OWNER  MUST BE HELD BY SUCH NEW OWNER IN ESCROW ACCOUNTS AND MAY BE USED
BY SUCH NEW OWNER  SOLELY  FOR  THE  PURPOSE  OF  MAKING  MAJOR  CAPITAL
IMPROVEMENTS TO THE PROJECT.
  2.  NO  RENTAL  OR  OTHER  CHARGE MAY BE INCREASED BY THE NEW OWNER TO
DEFRAY THE COST OF ANY MAJOR CAPITAL IMPROVEMENT UNLESS AND UNTIL ALL OF
SUCH RESERVE AND SURPLUS FUNDS HAVE BEEN EXPENDED TO DEFRAY THE COST  OF
MAJOR CAPITAL IMPROVEMENTS.
  S  2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.



 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01002-01-1

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