Senate Bill S2070

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

                                  2070

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 11, 2009
                               ___________

Introduced  by  Sens.  HUNTLEY, ADAMS, DIAZ, KRUEGER, PARKER, SAMPSON --
  read twice and ordered printed, and when printed to  be  committed  to
  the Committee on Finance

AN  ACT  to amend the private housing finance law, in relation to estab-
  lishing the mutual housing company rehabilitation loan fund and making
  an appropriation therefor

  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
article 26 to read as follows:
                               ARTICLE 26
             MUTUAL HOUSING COMPANY REHABILITATION LOAN FUND
SECTION 1203. STATEMENT OF LEGISLATIVE FINDINGS AND PURPOSES.
        1204. DEFINITIONS.
        1205. MUTUAL HOUSING COMPANY REHABILITATION LOAN FUND CONTRACTS.
        1206. GENERAL AND ADMINISTRATIVE PROVISIONS.
  S 1203. STATEMENT OF LEGISLATIVE FINDINGS AND PURPOSES.  THE  LEGISLA-
TURE  HEREBY  FINDS  AND  DECLARES  THAT THE PROJECTS OF CERTAIN LIMITED
PROFIT MUTUAL HOUSING COMPANIES HAVE OVER TIME SUFFERED SERIOUS  DETERI-
ORATION  OF  MAJOR  COMPONENTS  AND SYSTEMS. STATE AND LOCAL GOVERNMENTS
HAVE INVESTED IN THE CONSTRUCTION AND OPERATION OF THESE PROJECTS  OWNED
AND  OPERATED  AS  COOPERATIVES BY SUCH COMPANIES. THE PROVISIONS OF THE
REHABILITATION LOAN PROGRAM ESTABLISHED PURSUANT  TO  THIS  ARTICLE  ARE
DECLARED TO BE IN THE PUBLIC INTEREST AND NECESSARY FOR THE PRESERVATION
OF THIS VITAL AND IRREPLACEABLE ASSET.
  S 1204. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
  1.  "AGENCY"  SHALL  MEAN  THE  NEW  YORK STATE HOUSING FINANCE AGENCY
CREATED BY SECTION FORTY-THREE OF THIS CHAPTER.
  2. "PROJECT" SHALL MEAN ANY PROPERTY  WHICH  IS  OWNED  AS  A  LIMITED
PROFIT MUTUAL HOUSING COMPANY PURSUANT TO ARTICLE TWO OF THIS CHAPTER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02677-01-9

              

S. 2070                             2

  3.  "ELIGIBLE  APPLICANT"  SHALL  MEAN A LIMITED PROFIT MUTUAL HOUSING
COMPANY WITHIN A CITY WITH A POPULATION OF ONE MILLION OR MORE WHICH HAS
BEEN IN EXISTENCE FOR A PERIOD OF TWENTY YEARS OR MORE AND IS SUBJECT TO
SUPERVISION BY EITHER THE COMMISSIONER OR THE SUPERVISING AGENCY.
  4.  "REHABILITATION"  SHALL  MEAN  THE RECONSTRUCTION, IMPROVEMENT, OR
RECONDITIONING OF EXISTING NON-CONSTRUCTION RELATED DETERIORATED  CONDI-
TIONS, WHICH WILL BENEFIT AND PRESERVE THE PROJECT AS A WHOLE.
  S  1205. MUTUAL HOUSING COMPANY REHABILITATION LOAN FUND CONTRACTS. 1.
WITHIN THE LIMIT OF FUNDS AVAILABLE IN THE MUTUAL HOUSING COMPANY  REHA-
BILITATION  LOAN  FUND,  THE  AGENCY  IS HEREBY AUTHORIZED TO ENTER INTO
CONTRACTS WITH ELIGIBLE APPLICANTS TO PROVIDE LOANS WHICH SUCH  ELIGIBLE
APPLICANTS SHALL USE FOR PROJECT REHABILITATION. THE AGENCY SHALL APPOR-
TION ALLOCATIONS FROM THE FUND AMONG ELIGIBLE APPLICANTS IN AN EQUITABLE
MANNER  AND  SHALL  NOT  MAKE  ANY SUCH ALLOCATION IN A GIVEN YEAR TO AN
APPLICANT WHICH WILL, IN SUCH YEAR RECEIVE TEN PERCENT OR  MORE  OF  THE
MONIES AVAILABLE IN THE FUND.
  2.  NO  SUCH  LOAN  MAY  BE MADE OR ITS TERM EXTENDED PURSUANT TO THIS
ARTICLE, UNLESS THE AGENCY DETERMINES THAT THE ELIGIBLE APPLICANT CANNOT
AFFORD OR OBTAIN THE FINANCING NECESSARY TO ACCOMPLISH THE  PURPOSES  OF
SUCH LOAN THROUGH THE ORDINARY UNAIDED OPERATION OF PRIVATE ENTERPRISE.
  3.  THE  AGENCY  SHALL  NOT ENTER INTO LOANS UNDER THIS ARTICLE EXCEPT
WITH AN ELIGIBLE APPLICANT WHICH HAS SUBMITTED A PLAN ACCEPTABLE TO  THE
AGENCY  WHICH  PROVIDES  THAT  SUBSEQUENT  TO REHABILITATION THE PROJECT
SHALL BE MAINTAINED IN SUBSTANTIALLY IMPROVED CONDITION  THAN  PRIOR  TO
THE MAKING OF SUCH LOAN.
  4.  SUCH CONTRACTS MAY PROVIDE FOR  LOANS BY THE AGENCY FOR THE ACTIV-
ITIES TO BE CARRIED OUT BY THE ELIGIBLE APPLICANT  UNDER  THE  CONTRACT,
INCLUDING  PARTICIPATION  IN  LOANS INCLUDING BUT NOT LIMITED TO PARTIC-
IPATION IN LOANS ORIGINATED  OR  FINANCED  BY  LENDING  INSTITUTIONS  AS
DEFINED IN SECTION FORTY-TWO OF THIS CHAPTER, PRIVATE OR PUBLIC EMPLOYEE
PENSION  FUNDS  OR THE STATE OF NEW YORK MORTGAGE AGENCY. LOANS SHALL BE
AT THE PREVAILING INTEREST RATE IN THE AREA FOR  LONG  TERM  RESIDENTIAL
MORTGAGES OR AT SUCH LOWER RATE AS THE AGENCY DETERMINES TO BE NECESSARY
FOR THE PROJECT TO BE FINANCIALLY FEASIBLE. LOANS SHALL NOT EXCEED NINE-
TY-FIVE PERCENT OF THE REHABILITATION COSTS.  THE TERM OF THE LOAN SHALL
NOT EXCEED TEN YEARS UNLESS EXTENDED FOR PERIODS NOT TO EXCEED TEN YEARS
IN  WHICH  CASE THE TERM OF THE LOAN AS EXTENDED SHALL NOT EXCEED THIRTY
YEARS IN THE AGGREGATE AND THE AMORTIZATION SCHEDULE FOR THE LOAN  SHALL
NOT EXCEED THIRTY YEARS.
  5.  THE AGENCY SHALL PROVIDE FOR THE REVIEW, AT PERIODIC INTERVALS NOT
LESS THAN ANNUALLY, OF THE PERFORMANCE OF APPLICANTS RECEIVING FINANCIAL
ASSISTANCE PURSUANT TO THIS ARTICLE.  SUCH  REVIEW  SHALL,  AMONG  OTHER
THINGS,  BE  FOR  THE PURPOSES OF ASCERTAINING CONFORMITY TO CONTRACTUAL
PROVISIONS, THE FINANCIAL INTEGRITY AND EFFICIENCY OF APPLICANTS AND THE
EVALUATION OF THE APPLICANTS' ACTIVITIES. CONTRACTS ENTERED INTO  PURSU-
ANT TO THIS ARTICLE MAY BE TERMINATED, FUNDS MAY BE WITHHELD AND UNSPENT
FUNDS RECAPTURED BY THE AGENCY UPON A FINDING OF SUBSTANTIAL NONPERFORM-
ANCE OR BREACH BY THE APPLICANT OF ITS OBLIGATIONS UNDER ITS CONTRACT.
  S 1206. GENERAL AND ADMINISTRATIVE PROVISIONS. 1. THE AGENCY MAY ISSUE
AND  PROMULGATE  RULES  AND  REGULATIONS  FOR THE ADMINISTRATION OF THIS
ARTICLE. THE RULES AND REGULATIONS SHALL INCLUDE  PROVISIONS  CONCERNING
THE  ELIGIBILITY  OF  APPLICANTS  FOR  LOANS UNDER THIS ARTICLE; FUNDING
CRITERIA AND THE FUNDING DETERMINATION PROCESS; SUPERVISION  AND  EVALU-
ATION OF CONTRACTING APPLICANTS; REPORTING, BUDGETING AND RECORD-KEEPING
REQUIREMENTS;  PROVISIONS FOR MODIFICATION AND TERMINATION OF CONTRACTS;
AND SUCH OTHER MATTERS NOT INCONSISTENT WITH THE PURPOSES AND PROVISIONS

S. 2070                             3

OF THIS ARTICLE AS THE AGENCY SHALL DEEM NECESSARY, PROPER AND APPROPRI-
ATE.
  2.  THE  AGENCY  MAY  PROVIDE  TECHNICAL  SERVICES  AND  ASSISTANCE OR
CONTRACT TO PROVIDE TECHNICAL SERVICES AND ASSISTANCE TO ELIGIBLE APPLI-
CANTS TO COMPLY WITH THE PROVISIONS AND INTENT  OF  THIS  ARTICLE  WHICH
SERVICES AND ASSISTANCE MAY INCLUDE BUT SHALL NOT NECESSARILY BE LIMITED
TO FINANCIAL PACKAGING AND ENGINEERING AND ARCHITECTURAL SERVICES NECES-
SARY FOR THE PREPARATION OF PROPOSALS FOR ENTERING INTO CONTRACTS.
  3.  THE  AGENCY  AND  APPLICANTS SHALL DEPOSIT ANY RECAPTURED FUNDS OR
FUNDS FROM THE REPAYMENT OF LOANS AND INTEREST RECEIVED  ON  LOANS  INTO
THE MUTUAL HOUSING COMPANY REHABILITATION LOAN FUND.
  4.  NOTWITHSTANDING  THE  PROVISIONS  OF  ARTICLE  ONE-A OF THE PUBLIC
AUTHORITIES LAW, CONTRACTS ENTERED INTO BY THE AGENCY PURSUANT  TO  THIS
ARTICLE  SHALL  NOT BE SUBJECT TO THE PROVISIONS OF ARTICLE ONE-A OF THE
PUBLIC AUTHORITIES LAW.
  5. THE AGENCY SHALL REQUIRE THE SUBMISSION OF THE NAMES, ADDRESSES AND
BUSINESS BACKGROUND OF THE PRINCIPALS  INVOLVED,  THE  NATURE  OF  THEIR
FIDUCIARY  RELATIONSHIP  AND THEIR FINANCIAL RELATIONSHIP, PAST, PRESENT
AND FUTURE, TO THE PROJECT AND TO EACH OTHER.
  S 2. The private housing finance  law  is  amended  by  adding  a  new
section 59-j to read as follows:
  S  59-J.  MUTUAL  HOUSING COMPANY REHABILITATION LOAN FUND. THE AGENCY
SHALL CREATE AND ESTABLISH A SPECIAL FUND TO  BE  KNOWN  AS  THE  MUTUAL
HOUSING  COMPANY  REHABILITATION  LOAN FUND AND SHALL PAY INTO SUCH FUND
ANY MONEYS WHICH MAY BE MADE AVAILABLE TO SUCH AGENCY FOR  THE  PURPOSES
OF  SUCH FUND FROM ANY SOURCE INCLUDING BUT NOT LIMITED TO MONEYS APPRO-
PRIATED BY AND MADE AVAILABLE PURSUANT TO APPROPRIATION  BY  THE  STATE,
AND  ANY  INCOME  OR LOAN REPAYMENTS OR INTEREST EARNED BY, OR INCREMENT
TO, THE FUND DUE TO THE INVESTMENT THEREOF OR  LOANS  MADE  PURSUANT  TO
ARTICLE  TWENTY-SIX  OF  THIS CHAPTER. THE MONEYS HELD IN OR CREDITED TO
THE FUND ESTABLISHED UNDER THIS SECTION  SHALL  BE  EXPENDED  SOLELY  TO
CARRY OUT THE PROVISIONS OF ARTICLE TWENTY-SIX OF THIS CHAPTER.
  S  3. The sum of ten million dollars ($10,000,000), or so much thereof
as may be necessary, is hereby appropriated to the New York state  hous-
ing finance agency out of any moneys in the state treasury in the gener-
al fund to the credit of the state purposes account not otherwise appro-
priated,  for  the  purpose of the mutual housing company rehabilitation
loan fund, in carrying out the provisions of this act.
  S 4. This act shall take effect immediately.