NY State Senate Bill 2009-S4622

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to housing, construction and community development
Apr 24, 2009	referred to housing, construction and community development

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2009-S4622 (ACTIVE) - Details

Current Committee:: Senate Housing, Construction And Community Development
Law Section:: New York City Administrative Code
Laws Affected:: Amd §§26-405 & 26-511, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974; amd §467-b, RPT L

2009-S4622 (ACTIVE) - Summary

Provides that the division of housing and community renewal for the city of New York shall set forth and periodically update a schedule by which landlords may pass along to tenants the cost of major capital improvements; provides that such "pass along" charge may not exceed six percent of the base rent, and shall be a temporary increase; provides that after the cost of the improvement has been recouped, such "pass along" charge shall be reduced by half and shall become a permanent increase to the base rent.

2009-S4622 (ACTIVE) - Sponsor Memo

2009-S4622 (ACTIVE) - Bill Text download pdf

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

                                  4622

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 24, 2009
                               ___________

Introduced by Sens. ONORATO, DILAN, HASSELL-THOMPSON, C. JOHNSON, KLEIN,
  PARKER,  SAMPSON, THOMPSON -- 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 administrative code of the city of New York, the
  emergency tenant protection act of nineteen seventy-four and the  real
  property  tax  law,  in  relation  to rent increases for major capital
  improvements

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

  Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
26-405 of the administrative code of the city of New York, as amended by
chapter 749 of the laws of 1990, is amended to read as follows:
  (g)    There  has  been  since July first, nineteen hundred seventy, a
major capital improvement [required for the operation,  preservation  or
maintenance  of the structure] PROVIDED THAT THE COMMISSIONER FINDS THAT
SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER THE INTERNAL REVENUE CODE
AND SUCH IMPROVEMENTS  ARE  REQUIRED  FOR  THE  CONTINUED,  IMPROVED  OR
PROLONGED  OPERATION  OR PRESERVATION OF THE STRUCTURE.  THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL PROMULGATE A COST SCHEDULE  REFLECT-
ING  THE REASONABLE INDUSTRY-WIDE ACTUAL COST OF SUCH IMPROVEMENTS WHICH
SHALL BE UPDATED PERIODICALLY TO ACCURATELY REFLECT SUCH COST.  ONE-HALF
OF THE COST OF THE IMPROVEMENTS SHALL BE AMORTIZED OVER A PERIOD OF TIME
OF  SUCH  DURATION  AS WILL ENABLE SUCH AMOUNT TO BE FULLY RECOUPED AS A
TEMPORARY SURCHARGE TO LEGAL REGULATED RENT BASED  UPON  THE  REASONABLE
INDUSTRY-WIDE ACTUAL COST CITED IN THE COST SCHEDULE PROVIDED FOR HEREIN
IF  SO  CITED,  OR THE ACTUAL CASH PURCHASE PRICE WHICHEVER IS LESS. THE
BALANCE OF THE COST OF SUCH IMPROVEMENTS SHALL BE A  PERMANENT  INCREASE
IN  THE  LEGAL RENT.  THE COLLECTION OF ANY SUCH SURCHARGE OR SURCHARGES
FOR ANY APARTMENT PURSUANT  TO  THIS  PARAGRAPH  SHALL  NOT  EXCEED  SIX
PERCENT FROM THE EFFECTIVE DATE OF THE ORDER GRANTING THE SURCHARGE OVER
THE  RENT  SET FORTH IN THE SCHEDULE OF GROSS RENTS, WITH COLLECTABILITY
OF ANY DOLLAR EXCESS ABOVE SAID SUM TO  BE  SPREAD  FORWARD  IN  SIMILAR
INCREMENTS  AND  ADDED  TO  THE STABILIZED RENT AS ESTABLISHED OR SET IN

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03794-01-9

S. 4622                             2

FUTURE YEARS. THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL MAKE A
DETERMINATION UPON  APPLICATION  FOR  SURCHARGE  BY  OWNERS  WITHIN  ONE
HUNDRED  TWENTY  DAYS OF THE INITIAL FILING OF SUCH APPLICATION WITH ANY
SURCHARGE TO RENTS TO BEGIN ONLY AFTER FINAL DETERMINATION HAS BEEN MADE
AND  AFTER  ALL IMMEDIATELY HAZARDOUS VIOLATIONS, AS DETERMINED PURSUANT
TO REGULATIONS OF THE AGENCY ADMINISTERING AND ENFORCING A BUILDING CODE
IN THE JURISDICTION IN WHICH THE PROPERTY IS LOCATED, HAVE BEEN CURED.
  UPON APPROVAL OF THE APPLICATION PROVIDED FOR HEREIN, THE DIVISION  OF
HOUSING  AND COMMUNITY RENEWAL SHALL PROVIDE THE TENANTS IN OCCUPANCY IN
SUCH BUILDINGS WITH NOTICE THEREOF. An adjustment  under  this  subpara-
graph  (g)  shall be in an amount sufficient to amortize the cost of the
improvements pursuant to this subparagraph (g) over a seven-year period;
or
  S 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
tive code of the city of New York, as amended by chapter 116 of the laws
of 1997, is amended to read as follows:
  (6) provides criteria whereby the commissioner may act  upon  applica-
tions  by  owners  for  increases  in  excess  of the level of fair rent
increase established under this law provided, however, that such  crite-
ria  shall provide [(a)] as to hardship applications, for a finding that
the level of fair rent increase is not sufficient to enable the owner to
maintain approximately the same average annual net income  (which  shall
be  computed  without regard to debt service, financing costs or manage-
ment fees) for the three year period ending on or within six  months  of
the  date  of  an application pursuant to such criteria as compared with
annual net income, which prevailed on the average over the period  nine-
teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
first three years of operation if the building was completed since nine-
teen hundred sixty-eight or for the first three  fiscal  years  after  a
transfer of title to a new owner provided the new owner can establish to
the  satisfaction  of  the commissioner that he or she acquired title to
the building as a result of a bona fide sale of the entire building  and
that  the new owner is unable to obtain requisite records for the fiscal
years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
despite  diligent  efforts to obtain same from predecessors in title and
further provided that the new owner can provide financial data  covering
a  minimum  of  six  years under his or her continuous and uninterrupted
operation of the building to meet the three year to three  year  compar-
ative  test  periods herein provided[; and (b) as to completed building-
wide major capital improvements, for a finding  that  such  improvements
are deemed depreciable under the Internal Revenue Code and that the cost
is  to  be  amortized over a seven-year period, based upon cash purchase
price exclusive  of  interest  or  service  charges].    Notwithstanding
anything  to the contrary contained herein, no hardship increase granted
pursuant to this paragraph shall, when added to the annual gross  rents,
as  determined  by  the  commissioner, exceed the sum of, (i) the annual
operating expenses, (ii) an allowance for management services as  deter-
mined  by  the  commissioner,  (iii) actual annual mortgage debt service
(interest and amortization) on its indebtedness to  a  lending  institu-
tion,  an  insurance company, a retirement fund or welfare fund which is
operated under the supervision of the banking or insurance laws  of  the
state  of  New  York  or  the United States, and (iv) eight and one-half
percent of that portion of the fair market value of the  property  which
exceeds  the  unpaid  principal  amount  of  the  mortgage  indebtedness
referred to in subparagraph (iii) of this paragraph. Fair  market  value
for  the  purposes of this paragraph shall be six times the annual gross

S. 4622                             3

rent. The collection of any increase in  the  stabilized  rent  for  any
apartment pursuant to this paragraph shall not exceed six percent in any
year from the effective date of the order granting the increase over the
rent  set  forth  in the schedule of gross rents, with collectability of
any dollar excess above said sum to be spread forward in similar  incre-
ments  and  added to the stabilized rent as established or set in future
years;
  S 3. Subdivision c of section 26-511 of the administrative code of the
city of New York is amended by adding a new paragraph  6-b  to  read  as
follows:
  (6-B) PROVIDES CRITERIA WHEREBY THE COMMISSIONER MAY ACT UPON APPLICA-
TION  BY  OWNERS  FOR  INCREASES  IN  EXCESS  OF  THE LEVEL OF FAIR RENT
INCREASE ESTABLISHED UNDER THIS LAW PROVIDED, HOWEVER, THAT SUCH  CRITE-
RIA  SHALL  PROVIDE AS TO COMPLETED BUILDING-WIDE MAJOR CAPITAL IMPROVE-
MENTS, FOR A FINDING THAT SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER
THE INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS  ARE  REQUIRED  FOR  THE
CONTINUED,  IMPROVED OR PROLONGED OPERATION, PRESERVATION OR MAINTENANCE
OF THE STRUCTURE.  THE DIVISION OF HOUSING AND COMMUNITY  RENEWAL  SHALL
PROMULGATE A COST SCHEDULE REFLECTING THE REASONABLE INDUSTRY-WIDE ACTU-
AL  COST  OF  SUCH  IMPROVEMENTS  WHICH SHALL BE UPDATED PERIODICALLY TO
ACCURATELY REFLECT SUCH COST. ONE-HALF OF THE COST OF  THE  IMPROVEMENTS
SHALL BE AMORTIZED OVER A PERIOD OF TIME OF SUCH DURATION AS WILL ENABLE
SUCH  AMOUNT  TO  BE FULLY RECOUPED AS A RENTAL SURCHARGE BASED UPON THE
REASONABLE INDUSTRY-WIDE ACTUAL COST CITED IN THE COST SCHEDULE PROVIDED
FOR HEREIN IF SO CITED, OR THE ACTUAL CASH PURCHASE PRICE  WHICHEVER  IS
LESS.  THE BALANCE OF THE COST OF SUCH IMPROVEMENTS SHALL BE A PERMANENT
INCREASE IN THE LEGAL RENT.  THE COLLECTION OF ANY INCREASE OR INCREASES
IN THE STABILIZED RENT FOR ANY  APARTMENT  PURSUANT  TO  THIS  PARAGRAPH
SHALL  NOT EXCEED SIX PERCENT IN ANY YEAR FROM THE EFFECTIVE DATE OF THE
ORDER GRANTING THE INCREASE OVER THE RENT SET FORTH IN THE  SCHEDULE  OF
GROSS  RENTS, WITH COLLECTABILITY OF ANY DOLLAR EXCESS ABOVE SAID SUM TO
BE SPREAD FORWARD IN SIMILAR INCREMENTS AND ADDED TO THE STABILIZED RENT
AS ESTABLISHED OR SET IN FUTURE  YEARS.  THE  DIVISION  OF  HOUSING  AND
COMMUNITY  RENEWAL  SHALL  MAKE  A  DETERMINATION  UPON  APPLICATION FOR
INCREASE BY OWNERS WITHIN ONE HUNDRED TWENTY DAYS OF THE INITIAL  FILING
OF SUCH APPLICATION WITH ANY INCREASE IN RENTS TO BEGIN ONLY AFTER FINAL
DETERMINATION   HAS  BEEN  MADE  AND  AFTER  ALL  IMMEDIATELY  HAZARDOUS
VIOLATIONS, AS DETERMINED PURSUANT TO REGULATIONS OF THE  DEPARTMENT  OF
HOUSING PRESERVATION AND DEVELOPMENT, HAVE BEEN CURED.
  UPON  APPROVAL OF THE APPLICATION PROVIDED FOR HEREIN, THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE TENANTS IN OCCUPANCY  IN
SUCH BUILDINGS WITH NOTICE THEREOF.
   S  4. Paragraph 3 of subdivision d of section 6 of section 4 of chap-
ter  576  of  the  laws  of  1974,  constituting  the  emergency  tenant
protection  act  of  nineteen seventy-four, as amended by chapter 749 of
the laws of 1990, is amended to read as follows:
   (3) there has been since January [first,  nineteen  hundred  seventy-
four]  1,  1974 a major capital improvement [required for the operation,
preservation or maintenance of the structure] PROVIDED THAT THE  COMMIS-
SIONER  FINDS  THAT  SUCH  IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER THE
INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE CONTIN-
UED, IMPROVED OR PROLONGED OPERATION OR PRESERVATION OF  THE  STRUCTURE.
THE  DIVISION  OF  HOUSING AND COMMUNITY RENEWAL SHALL PROMULGATE A COST
SCHEDULE REFLECTING THE REASONABLE INDUSTRY-WIDE  ACTUAL  COST  OF  SUCH
IMPROVEMENTS  WHICH  SHALL BE UPDATED PERIODICALLY TO ACCURATELY REFLECT
SUCH COST. ONE-HALF OF THE COST OF THE IMPROVEMENTS SHALL  BE  AMORTIZED

S. 4622                             4

OVER  A PERIOD OF TIME OF SUCH DURATION AS WILL ENABLE SUCH AMOUNT TO BE
FULLY RECOUPED AS A TEMPORARY SURCHARGE TO LEGAL  REGULATED  RENT  BASED
UPON THE REASONABLE INDUSTRY-WIDE ACTUAL COST CITED IN THE COST SCHEDULE
PROVIDED  FOR  HEREIN  IF  SO  CITED,  OR THE ACTUAL CASH PURCHASE PRICE
WHICHEVER IS LESS. THE BALANCE OF THE COST OF SUCH IMPROVEMENTS SHALL BE
A PERMANENT INCREASE IN THE LEGAL RENT.   THE  COLLECTION  OF  ANY  SUCH
SURCHARGE  OR  SURCHARGES  FOR  ANY APARTMENT PURSUANT TO THIS PARAGRAPH
SHALL NOT EXCEED SIX PERCENT FROM THE EFFECTIVE DATE OF THE ORDER GRANT-
ING THE SURCHARGE OVER THE RENT SET  FORTH  IN  THE  SCHEDULE  OF  GROSS
RENTS,  WITH  COLLECTABILITY  OF  ANY DOLLAR EXCESS ABOVE SAID SUM TO BE
SPREAD FORWARD IN SIMILAR INCREMENTS AND ADDED TO THE STABILIZED RENT AS
ESTABLISHED OR SET IN FUTURE YEARS. THE DIVISION OF HOUSING AND COMMUNI-
TY RENEWAL SHALL MAKE A DETERMINATION UPON APPLICATION FOR SURCHARGE  BY
OWNERS  WITHIN  ONE  HUNDRED  TWENTY  DAYS OF THE INITIAL FILING OF SUCH
APPLICATION WITH ANY SURCHARGE TO RENTS TO BEGIN ONLY AFTER FINAL DETER-
MINATION HAS BEEN MADE AND AFTER ALL IMMEDIATELY  HAZARDOUS  VIOLATIONS,
AS  DETERMINED  PURSUANT  TO REGULATIONS OF THE AGENCY ADMINISTERING AND
ENFORCING A BUILDING CODE IN THE JURISDICTION IN WHICH THE  PROPERTY  IS
LOCATED, HAVE BEEN CURED.
  UPON  APPROVAL OF THE APPLICATION PROVIDED FOR HEREIN, THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE TENANTS IN OCCUPANCY  IN
SUCH  BUILDINGS  WITH NOTICE THEREOF. An adjustment under this paragraph
shall be in an amount sufficient to amortize the cost  of  the  improve-
ments pursuant to this paragraph over a seven-year period, or
  S 5. Paragraph e of subdivision 1 of section 467-b of the real proper-
ty tax law, as amended by chapter 555 of the laws of 1977, is amended to
read as follows:
  e.  "Increase  in  maximum  rent  or  legal  regulated rent" means any
increase in the maximum rent or the legal regulated rent for the  dwell-
ing  unit  in question pursuant to the applicable rent control law or to
the emergency tenant protection act of  nineteen  seventy-four,  respec-
tively,  or such classes of increase thereunder as may be specified in a
local law, ordinance or resolution enacted  pursuant  to  this  section,
INCLUDING ANY INCREASE ATTRIBUTABLE TO A MAJOR CAPITAL IMPROVEMENT, over
such  base period rent as shall be provided therein or an exemption from
the maximum rent or legal regulated rent as specified in paragraph c  or
d of subdivision three of this section;
  S  6. This act shall take effect immediately; provided that the amend-
ment to section 26-405 of the city rent and rehabilitation law  made  by
section  one  of  this act shall remain in full force and effect only so
long as the public emergency requiring the  regulation  and  control  of
residential  rents and evictions continues, as provided in subdivision 3
of section 1 of the  local  emergency  housing  rent  control  act,  and
provided  further  that  the  amendment  to  section  26-511 of the rent
stabilization law of nineteen hundred sixty-nine made  by  sections  two
and  three of this act shall expire on the same date as such law expires
and shall not affect the  expiration  of  such  law  as  provided  under
section 26-520 of such law, and provided that the amendment to section 6
of  the emergency tenant protection act of nineteen seventy-four made by
section four of this act shall expire on  the  same  date  as  such  act
expires  and  shall not affect the expiration of such act as provided in
section 17 of chapter 576 of the laws of 1974, as amended, and  provided
further that the amendment to section 467-b of the real property tax law
made by section five of this act shall not affect the expiration of such
section and shall be deemed to expire therewith.

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Senate Bill S4622

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