senate Bill S5047

2011-2012 Legislative Session

Provides for decontrol of rent regulated housing accommodations when total average annual income over two calendar years exceeds $175,000

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to housing, construction and community development
Jun 24, 2011 committed to rules
Jun 07, 2011 advanced to third reading
Jun 06, 2011 2nd report cal.
Jun 02, 2011 1st report cal.928
May 03, 2011 referred to housing, construction and community development

Votes

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Jun 2, 2011 - Housing, Construction and Community Development committee Vote

S5047
5
3
committee
5
Aye
3
Nay
0
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Housing, Construction and Community Development Committee Vote: Jun 2, 2011

S5047 - Bill Details

Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Emergency Tenant Protection Act of 1974
Laws Affected:
Amd §§5 & 5-a, Emerg Ten Prot Act of 1974; amd §§2 & 2-a, Emerg Hous Rent Cont L; amd §§26-504.1, 26-504.3, 26-403 & 26-403.1, NYC Ad Cd

S5047 - Bill Texts

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Provides for decontrol of rent regulated housing accommodations when total average annual income over two calendar years exceeds $175,000.

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BILL NUMBER:S5047

TITLE OF BILL:
An act
to amend the emergency tenant protection act of nineteen seventy-four,
the emergency housing rent control law and the administrative code of
the city of New York, in relation to the deregulation of rents for
high-income rent regulated tenants

PURPOSE:
This bill would lower the rent threshold used as part of the high
income/high rent deregulation laws that apply to rent regulated tenants.

SUMMARY OF PROVISIONS:
The bill would eliminate the rent threshold component of the high
income/high rent deregulation laws that apply to rent regulated tenants.
The bill would exempt tenants who receive various other forms of public
assistance from the high income deregulation process. In addition,
currently, the law requires that a tenant have a federal adjusted gross
income of $175,000 for each of the prior two years. This bill would
require that the determination be based upon gross income, not adjusted
gross income, and that it be based upon an average of $175,000 for the
prior two years, not $175,000 for each of the prior two years.

JUSTIFICATION:
In 1993, the State Legislature enacted two forms of rent deregulation.
That law, as amended by subsequent legislation in 1997, provides
currently that (1) for in-place tenants, an apartment can be deregulated
where the legal regulated rent for the apartment exceeds $2,000 per
month and the income for the tenant exceeds $175,000 and (2) for
apartments after vacancy, an apartment can be deregulated where the
legal regulated rent for the apartment exceeds $2,000 per month. This
legislation addresses only the first form of deregulation, known as
high-income/high rent deregulation; the second form, the so-called high
rent/vacancy deregulation, is the much more commonly used deregulation
mechanism and is unaffected by this legislation.

One of the fundamental failings of rent regulation is that there is no
correlation between a tenant's rent regulated status and their financial
status. The rent regulatory system is, for all practical purposes, a
lottery, premised not upon need but upon the mere fortuitousness of
being in the right place at the right time. Nowhere is this failing
truer than in the context of high-income/high-rent deregulation.

The high-rent/high-income deregulation process occurs when the legal
regulated rent of an in-place tenant exceeds $2,000. Briefly stated,
when a tenant's rent pierces that threshold, a property owner can
commence a process whereby the State Department of Taxation and Finance
examines its records to determine whether the tenant's income exceeds
$175,000 for each of the prior two years. If the income exceeds that
threshold, the tenant's apartment becomes deregulated; if their income
does not exceed the threshold, the apartment remains regulated, at least
until the process is used again in the future.

The problem with the existing structure of the law is that it only
applies to high-income tenants whose legal regulated rent exceeds
$2,000. Those fortunate, high-income tenants whose rents are below


$2,000 remain insulated from deregulation. The irony is that these
high-income tenants, the ones who pay less than $2,000 per month, are
even less-deserving of rent regulatory protection than high-income
tenants who pay more than $2,000. The law should not provide rent
regulatory benefits or protections to any high-income tenants,
regardless of the amount of rent that they pay.

An irrational rent regulatory system is made even more irrational when
the least-deserving high-income tenants are enriched while property
owners bear the burdens of receiving reduced rental income and while the
City and State receive less tax revenue as a result. The arbitrary
threshold of $2,000 per month should be eliminated as a step towards
creating a more needs-based system, not one dependent upon the luck of
the draw.

While tenants, generally, should be subject to the income determination
procedures, there are Obvious situations where tenants, specifically
those who receive various forms of public assistance, earn less than
$175,000. Including those tenants in this process would be unnecessary
and wasteful at best and the bill exempts them from the high-income
deregulation process. The other provisions of this bill are intended to
ensure that high-income tenants do not circumvent the deregulation
provisions of the rent laws.

LEGISLATIVE HISTORY: New Bill

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:
This act shall take effect immediately.

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

                                  5047

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sen.  YOUNG  -- 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 emergency tenant protection act of nineteen seven-
  ty-four, the emergency housing rent control law and the administrative
  code of the city of New York, in relation to the deregulation of rents
  for high-income rent regulated tenants

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

  Section  1. Paragraph 12 of subdivision a of section 5 of section 4 of
chapter 576 of the laws  of  1974,  constituting  the  emergency  tenant
protection  act  of  nineteen seventy-four, as amended by chapter 116 of
the laws of 1997, is amended to read as follows:
  (12) upon   issuance of an order by  the  division,  housing  accommo-
dations  which are[:   (1)] occupied by persons who have a total AVERAGE
annual income in excess of one hundred seventy-five thousand dollars per
annum [in each of] FOR the two preceding calendar years, as  defined  in
and  subject  to the limitations and process set forth in section five-a
of this act[; and (2) have  a  legal  regulated  rent  of  two  thousand
dollars or more per month.]  Provided however, that this exclusion shall
not  apply  to  housing accommodations which became or become subject to
this act (a) by virtue of receiving tax  benefits  pursuant  to  section
four  hundred twenty-one-a or four hundred eighty-nine of the real prop-
erty tax law, except as otherwise provided in subparagraph (i) of  para-
graph (f) of subdivision two of section four hundred twenty-one-a of the
real property tax law, or (b) by virtue of article seven-C of the multi-
ple dwelling law.
  S  2.    Section  5-a of section 4 of chapter 576 of the laws of 1974,
constituting the emergency tenant protection act  of  nineteen  seventy-
four,  as  added by chapter 253 of the laws of 1993, subdivision (b) and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10119-02-1

S. 5047                             2

paragraphs 1 and 2 of subdivision (c) as amended and subdivision (e)  as
added by chapter 116 of the laws of 1997, is amended to read as follows:
  S  5-a.  High income rent decontrol. (a) For purposes of this section,
annual income shall mean the federal [adjusted] gross income as reported
on the New York state income tax return. Total annual income  means  the
sum  of the annual incomes of all persons whose names are recited as the
tenant or co-tenant on a lease who occupy the housing accommodation  and
all other persons that occupy the housing accommodation as their primary
residence on other than a temporary basis, excluding bona fide employees
of  such  occupants  residing therein in connection with such employment
and  excluding  bona  fide  subtenants  in  occupancy  pursuant  to  the
provisions of section two hundred twenty-six-b of the real property law.
In  the  case where a housing accommodation is sublet, the annual income
of the tenant or co-tenant recited on the lease who  will  reoccupy  the
housing  accommodation  upon  the  expiration  of  the sublease shall be
considered.
  (b) On or before the first day of May in each calendar year, the owner
of each housing accommodation for which the legal regulated rent is  two
thousand  dollars  or  more  per month may provide the tenant or tenants
residing therein with an income certification form prepared by the divi-
sion of housing and community renewal on which such  tenant  or  tenants
shall  identify  all  persons  referred  to  in  subdivision (a) of this
section and shall certify whether the total AVERAGE annual income is  in
excess of one hundred seventy-five thousand dollars [in each of] FOR the
two preceding calendar years. Such income certification form shall state
that  the  income  level  certified  to  by the tenant may be subject to
verification by the department  of  taxation  and  finance  pursuant  to
section  one hundred seventy-one-b of the tax law, and shall not require
disclosure of any information  other  than  whether  the  aforementioned
threshold has been exceeded. Such income certification form shall clear-
ly  state  that:  (i)  [only  tenants residing in housing accommodations
which had a legal regulated rent of two thousand  dollars  or  more  per
month  are  required  to  complete  the  certification  form; (ii) that]
tenants have protections available to them which are designed to prevent
harassment; [(iii) that] AND (II) tenants are not  required  to  provide
any information regarding their income except that which is requested on
the  form  and  may  contain  such  other information the division deems
appropriate. The tenant or tenants shall return  the  completed  certif-
ication to the owner within thirty days after service upon the tenant or
tenants.  In the event that the total AVERAGE annual income as certified
is in excess of one hundred seventy-five thousand dollars in  each  such
year,  the  owner  may file the certification with the state division of
housing and community renewal on or before June thirtieth of such  year.
Upon  filing  such  certification with the division, the division shall,
within thirty days after the filing, issue an order providing that  such
housing accommodation shall not be subject to the provisions of this act
upon the expiration of the existing lease. A copy of such order shall be
mailed  by  regular and certified mail, return receipt requested, to the
tenant or tenants and a copy thereof  shall  be  mailed  to  the  owner.
NOTWITHSTANDING  THE FOREGOING, THE PROVISIONS OF THIS SECTION SHALL NOT
APPLY TO ANY TENANT WHOSE RENT IS PAYABLE BY DIRECT  GOVERNMENT  HOUSING
SUBSIDY,  ANY  CURRENTLY  EFFECTIVE  RENT  INCREASE EXEMPTION FOR SENIOR
CITIZENS OR PERSONS WITH DISABILITIES  AUTHORIZED  PURSUANT  TO  SECTION
FOUR  HUNDRED  SIXTY-SEVEN-B  OR  FOUR HUNDRED SIXTY-SEVEN-C OF THE REAL
PROPERTY TAX LAW, DIRECT PAYMENT OF RENT OR A TWO-PARTY CHECK ISSUED  BY
A  SOCIAL  SERVICES  DISTRICT OR THE DEPARTMENT OF FAMILY ASSISTANCE, OR

S. 5047                             3

RENTAL ASSISTANCE THAT IS PAYABLE PURSUANT TO  COURT  ORDERS  ISSUED  IN
LITIGATION COMMENCED IN NINETEEN HUNDRED EIGHTY-SEVEN IN A PROCEEDING IN
WHICH  THE  AMOUNT OF SHELTER ALLOWANCE IS AT ISSUE ON BEHALF OF RECIPI-
ENTS OF AID TO DEPENDENT CHILDREN.
  (c)  1.  In the event that the tenant or tenants either fail to return
the completed certification to the owner on or before the date  required
by  subdivision  (b)  of  this section or the owner disputes the certif-
ication returned by the tenant or tenants, the owner may, on  or  before
June  thirtieth of such year, petition the state division of housing and
community renewal to verify, pursuant to section  one  hundred  seventy-
one-b  of  the  tax law, whether the total AVERAGE annual income exceeds
one hundred seventy-five thousand dollars in each of the  two  preceding
calendar years. Within twenty days after the filing of such request with
the  division, the division shall notify the tenant or tenants that such
tenant or tenants named on the lease must provide the division with such
information as the division and the department of taxation  and  finance
shall  require to verify whether the total AVERAGE annual income exceeds
one hundred seventy-five thousand dollars [in each such  year]  FOR  THE
TWO PRECEDING CALENDAR YEARS.  The division's notification shall require
the  tenant or tenants to provide the information to the division within
sixty days of service upon such tenant or tenants and  shall  include  a
warning  in  bold  faced  type that failure to respond will result in an
order being issued by the division providing that such housing  accommo-
dations shall not be subject to the provisions of this act.
  2. If the department of taxation and finance determines that the total
annual  income is in excess of one hundred seventy-five thousand dollars
[in each of] FOR the two preceding calendar years, the  division  shall,
on  or  before  November  fifteenth  of  such year, notify the owner and
tenants of the results of such verification.  Both  the  owner  and  the
tenants shall have thirty days within which to comment on such verifica-
tion  results.    Within  forty-five  days  after  the expiration of the
comment period, the division shall, where appropriate,  issue  an  order
providing  that  such  housing accommodation shall not be subject to the
provisions of this act upon expiration of the existing lease. A copy  of
such order shall be mailed by regular and certified mail, return receipt
requested,  to the tenant or tenants and a copy thereof shall be sent to
the owner.  WHERE THE DEPARTMENT OF TAXATION AND FINANCE  IS  UNABLE  TO
DETERMINE  WHETHER  THE  TOTAL AVERAGE ANNUAL INCOME IS IN EXCESS OF ONE
HUNDRED SEVENTY-FIVE THOUSAND DOLLARS FOR  THE  TWO  PRECEDING  CALENDAR
YEARS, IT SHALL BE PRESUMED THAT THE TOTAL AVERAGE ANNUAL INCOME OF SUCH
TENANT IS IN EXCESS OF ONE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS FOR THE
TWO  PRECEDING CALENDAR YEARS AND THE PROCEDURES OF THIS PARAGRAPH SHALL
APPLY TO SUCH TENANT. THE DIVISION SHALL  PROMULGATE  REGULATIONS  WHICH
SET FORTH THE MANNER IN WHICH SUCH A TENANT MAY REBUT SUCH PRESUMPTION.
  3.  In the event the tenant or tenants fail to provide the information
required pursuant to paragraph one of  this  subdivision,  the  division
shall  issue, on or before December first of such year, an order provid-
ing that  such  housing  accommodation  shall  not  be  subject  to  the
provisions  of this act upon the expiration [or] OF the current lease. A
copy of such order shall be mailed by regular and certified mail, return
receipt requested, to the tenant or tenants and a copy thereof shall  be
sent to the owner.
  4.  The  provisions  of the state freedom of information act shall not
apply to any income information obtained by  the  division  pursuant  to
this section.

S. 5047                             4

  (d) This section shall apply only to paragraph twelve of subdivision a
of section five of this act.
  (e)  Upon receipt of such order of decontrol pursuant to this section,
an owner shall offer the housing accommodation subject to such order  to
the  tenant  at  a  rent not in excess of the market rent, which for the
purposes of this section means a rent  obtainable  in  an  arm's  length
transaction.  Such rental offer shall be made by the owner in writing to
the tenant by certified and regular mail and  shall  inform  the  tenant
that  such offer must be accepted in writing within ten days of receipt.
The tenant shall respond within ten days after receipt of such offer. If
the tenant declines the offer or fails to respond  within  such  period,
the  owner may commence an action or proceeding for the eviction of such
tenant.
  S 3. Paragraph (m) of subdivision 2 of section 2 of chapter 274 of the
laws of 1946, constituting the emergency housing rent  control  law,  as
amended  by  chapter  116  of  the  laws  of 1997, is amended to read as
follows:
  (m) upon the issuance of an order of decontrol by the division,  hous-
ing accommodations which[: (1)] are occupied by persons who have a total
AVERAGE  annual  income  in  excess of one hundred seventy-five thousand
dollars [in each of] PER ANNUM FOR the two preceding calendar years,  as
defined  in  and  subject  to  the  limitations and process set forth in
section two-a of this law[; and (2) have a maximum rent of two  thousand
dollars or more per month].
  S  4. Section 2-a of chapter 274 of the laws of 1946, constituting the
emergency housing rent control law, as added by chapter 253 of the  laws
of  1993,  subdivision  (b) and paragraphs 1 and 2 of subdivision (c) as
amended and subdivision (e) as added by chapter 116 of the laws of 1997,
is amended to read as follows:
  S 2-a. (a) For purposes of this section, annual income shall mean  the
federal [adjusted] gross income as reported on the New York state income
tax  return.  Total annual income means the sum of the annual incomes of
all persons who occupy the housing accommodation as their primary  resi-
dence  on other than a temporary basis, excluding bona fide employees of
such occupants residing therein in connection with such  employment  and
excluding  bona  fide subtenants in occupancy pursuant to the provisions
of section two hundred twenty-six-b of the real property law.    In  the
case  where  a housing accommodation is sublet, the annual income of the
sublessor shall be considered.
  (b) On or before the first day of May in each calendar year, the owner
of each housing accommodation [for which the maximum rent is  two  thou-
sand dollars or more per month] WHICH IS OCCUPIED BY A TENANT OR TENANTS
WHOM  THE OWNER IN GOOD FAITH BELIEVES HAS A TOTAL AVERAGE ANNUAL INCOME
IN EXCESS OF ONE HUNDRED  SEVENTY-FIVE  THOUSAND  DOLLARS  FOR  THE  TWO
PRECEDING  CALENDAR  YEARS  may  provide  the tenant or tenants residing
therein with an income certification form prepared by  the  division  of
housing  and  community  renewal  on  which such tenant or tenants shall
identify all persons referred to in subdivision (a) of this section  and
shall  certify  whether  the total AVERAGE annual income is in excess of
one hundred seventy-five thousand dollars  [in  each  of]  FOR  the  two
preceding  calendar  years.  Such  income certification form shall state
that the income level certified to by  the  tenant  may  be  subject  to
verification  by  the  department  of  taxation  and finance pursuant to
section one hundred seventy-one-b of the tax law and shall  not  require
disclosure  of  any  income information other than whether the aforemen-
tioned threshold has been exceeded. Such income certification form shall

S. 5047                             5

clearly state that: (i) [only tenants residing in housing accommodations
which had a maximum rent of two thousand dollars or more per  month  are
required  to  complete  the  certification form; (ii) that] tenants have
protections  available to them which are designed to prevent harassment;
[(iii) that] AND (II) tenants are not required to provide  any  informa-
tion  regarding  their income except that which is requested on the form
and may contain such other information the division  deems  appropriate.
The  tenant  or  tenants shall return the completed certification to the
owner within thirty days after service upon the tenant  or  tenants.  In
the event that the total AVERAGE annual income as certified is in excess
of  one  hundred  seventy-five  thousand  dollars in each such year, the
owner may file the certification with the state division of housing  and
community  renewal on or before June thirtieth of such year. Upon filing
such certification with the division, the division shall, within  thirty
days  after  the filing, issue an order of decontrol providing that such
housing accommodations shall not be subject to the  provisions  of  this
law  as  of the first day of June in the year next succeeding the filing
of the certification by the owner. A copy of such order shall be  mailed
by  regular  and certified mail, return receipt requested, to the tenant
or tenants and a copy thereof shall be mailed to the  owner.    NOTWITH-
STANDING  THE  FOREGOING, THE PROVISIONS OF THIS SECTION SHALL NOT APPLY
TO ANY TENANT WHOSE RENT IS PAYABLE BY DIRECT GOVERNMENT HOUSING  SUBSI-
DY,  ANY CURRENTLY EFFECTIVE RENT INCREASE EXEMPTION FOR SENIOR CITIZENS
OR PERSONS WITH DISABILITIES AUTHORIZED PURSUANT TO SECTION FOUR HUNDRED
SIXTY-SEVEN-B OR FOUR HUNDRED SIXTY-SEVEN-C OF  THE  REAL  PROPERTY  TAX
LAW,  DIRECT  PAYMENT  OF  RENT  OR A TWO-PARTY CHECK ISSUED BY A SOCIAL
SERVICES DISTRICT OR THE DEPARTMENT  OF  FAMILY  ASSISTANCE,  OR  RENTAL
ASSISTANCE THAT IS PAYABLE PURSUANT TO COURT ORDERS ISSUED IN LITIGATION
COMMENCED  IN NINETEEN HUNDRED EIGHTY-SEVEN IN A PROCEEDING IN WHICH THE
AMOUNT OF SHELTER ALLOWANCE IS AT ISSUE ON BEHALF OF RECIPIENTS  OF  AID
TO DEPENDENT CHILDREN.
  (c)  1.  In the event that the tenant or tenants either fail to return
the completed certification to the owner on or before the date  required
by  subdivision  (b)  of  this section or the owner disputes the certif-
ication returned by the tenant or tenants, the owner may, on  or  before
June  thirtieth of such year, petition the state division of housing and
community renewal to verify, pursuant to section  one  hundred  seventy-
one-b  of  the  tax law, whether the total AVERAGE annual income exceeds
one hundred seventy-five thousand dollars  [in  each  of]  FOR  the  two
preceding  calendar  years.  Within twenty days after the filing of such
request with the division, the  division  shall  notify  the  tenant  or
tenants  that such tenant or tenants must provide the division with such
information as the division and the department of taxation  and  finance
shall  require to verify whether the total AVERAGE annual income exceeds
one hundred seventy-five thousand dollars in each such year.  The  divi-
sion's  notification  shall require the tenant or tenants to provide the
information to the division within  sixty  days  of  service  upon  such
tenant  or  tenants  and shall include a warning in bold faced type that
failure to respond will result in an order of decontrol being issued  by
the division for such housing accommodation.
  2. If the department of taxation and finance determines that the total
AVERAGE  annual income is in excess of one hundred seventy-five thousand
dollars [in each of] FOR the two preceding calendar years, the  division
shall,  on  or  before November fifteenth of such year, notify the owner
and tenants of the results of such verification. Both the owner and  the
tenants shall have thirty days within which to comment on such verifica-

S. 5047                             6

tion  results.    Within  forty-five  days  after  the expiration of the
comment period, the division shall, where appropriate, issue an order of
decontrol providing that such housing accommodation shall not be subject
to  the  provisions of this law as of the first day of March in the year
next succeeding the filing of the owner's petition with the division.  A
copy of such order shall be mailed by regular and certified mail, return
receipt  requested, to the tenant or tenants and a copy thereof shall be
sent to the owner.   WHERE THE DEPARTMENT OF  TAXATION  AND  FINANCE  IS
UNABLE TO DETERMINE WHETHER THE TOTAL AVERAGE ANNUAL INCOME IS IN EXCESS
OF  ONE  HUNDRED  SEVENTY-FIVE  THOUSAND  DOLLARS  FOR THE TWO PRECEDING
CALENDAR YEARS, IT SHALL BE  PRESUMED  THAT  THE  TOTAL  AVERAGE  ANNUAL
INCOME  OF SUCH TENANT IS IN EXCESS OF ONE HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS FOR THE TWO PRECEDING CALENDAR YEARS AND THE PROCEDURES OF  THIS
PARAGRAPH SHALL APPLY TO SUCH TENANT. THE DIVISION OF HOUSING AND COMMU-
NITY  RENEWAL SHALL PROMULGATE REGULATIONS WHICH SET FORTH THE MANNER IN
WHICH SUCH A TENANT MAY REBUT SUCH PRESUMPTION.
  3. In the event the tenant or tenants fail to provide the  information
required  pursuant  to  paragraph  one of this subdivision, the division
shall issue, on or before December first  of  such  year,  an  order  of
decontrol providing that such housing accommodation shall not be subject
to  the  provisions of this law as of the first day of March in the year
next succeeding the last  day  on  which  the  tenant  or  tenants  were
required  to  provide the information required by such paragraph. A copy
of such order shall be mailed by  regular  and  certified  mail,  return
receipt  requested, to the tenant or tenants and a copy thereof shall be
sent to the owner.
  4. The provisions of the state freedom of information  act  shall  not
apply  to  any  income  information obtained by the division pursuant to
this section.
  (d) This section shall apply only to paragraph (m) of subdivision  two
of section two of this law.
  (e)  Upon receipt of such order of decontrol pursuant to this section,
an owner shall offer the housing accommodation subject to such order  to
the  tenant  at  a  rent not in excess of the market rent, which for the
purposes of this section means a rent  obtainable  in  an  arm's  length
transaction.  Such rental offer shall be made by the owner in writing to
the tenant by certified and regular mail and  shall  inform  the  tenant
that  such offer must be accepted in writing within ten days of receipt.
The tenant shall respond within ten days after receipt of such offer. If
the tenant declines the offer or fails to respond  within  such  period,
the  owner may commence an action or proceeding for the eviction of such
tenant.
  S 5. Section 26-504.1 of the administrative code of the  city  of  New
York,  as amended by chapter 116 of the laws of 1997, is amended to read
as follows:
  S 26-504.1 Exclusion of accommodations of high  income  renters.  Upon
the issuance of an order by the division, "housing accommodations" shall
not  include housing accommodations which[: (1)] are occupied by persons
who have a total AVERAGE annual income in excess of one  hundred  seven-
ty-five  thousand dollars per annum for each of the two preceding calen-
dar years, as defined in and subject to the limitations and process  set
forth  in  section 26-504.3 of this chapter[; and (2) have a legal regu-
lated rent of two thousand dollars or more per month]. Provided,  howev-
er,  that this exclusion shall not apply to housing accommodations which
became or become subject to this law (a)  by  virtue  of  receiving  tax
benefits  pursuant  to section four hundred twenty-one-a or four hundred

S. 5047                             7

eighty-nine of the real property tax law, except as  otherwise  provided
in  subparagraph (i) of paragraph (f) of subdivision two of section four
hundred twenty-one-a of the real property tax law, or (b) by  virtue  of
article seven-C of the multiple dwelling law.
  S  6.  Section  26-504.3 of the administrative code of the city of New
York, as added by chapter 253 of the laws of 1993, subdivision  (b)  and
paragraphs  1 and 2 of subdivision (c) as amended and subdivision (e) as
added by chapter 116 of the laws of 1997, is amended to read as follows:
  S 26-504.3 High income  rent  decontrol.  (a)  For  purposes  of  this
section, annual income shall mean the federal [adjusted] gross income as
reported  on  the  New York state income tax return. Total annual income
means the sum of the annual incomes  of  all  persons  whose  names  are
recited  as  the  tenant  or co-tenant on a lease who occupy the housing
accommodation and all other persons that  occupy  the  housing  accommo-
dation  as  their  primary  residence  on  other than a temporary basis,
excluding bona fide employees of  such  occupants  residing  therein  in
connection  with  such  employment and excluding bona fide subtenants in
occupancy pursuant to the provisions of section two hundred twenty-six-b
of the real property law. In the case where a housing  accommodation  is
sublet,  the  annual  income  of  the tenant or co-tenant recited on the
lease who will reoccupy the housing accommodation upon the expiration of
the sublease shall be considered.
  (b) On or before the first day of May in each calendar year, the owner
of each housing accommodation [for which the legal regulated rent is two
thousand dollars or more per month] WHICH IS OCCUPIED  BY  A  TENANT  OR
TENANTS WHOM THE OWNER IN GOOD FAITH BELIEVES HAS A TOTAL AVERAGE ANNUAL
INCOME  IN  EXCESS  OF ONE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS FOR THE
TWO PRECEDING CALENDAR YEARS may provide the tenant or tenants  residing
therein  with  an  income certification form prepared by the division of
housing and community renewal on which  such  tenant  or  tenants  shall
identify  all persons referred to in subdivision (a) of this section and
shall certify whether the total AVERAGE annual income is  in  excess  of
one  hundred  seventy-five  thousand  dollars  [in  each of] FOR the two
preceding calendar years. Such income  certification  form  shall  state
that  the  income  level  certified  to  by the tenant may be subject to
verification by the department  of  taxation  and  finance  pursuant  to
section  one  hundred seventy-one-b of the tax law and shall not require
disclosure of any income information other than  whether  the  aforemen-
tioned threshold has been exceeded. Such income certification form shall
clearly state that: (i) [only tenants residing in housing accommodations
which  have  a  legal regulated rent of two thousand dollars or more per
month are required  to  complete  the  certification  form;  (ii)  that]
tenants have protections available to them which are designed to prevent
harassment;  [(iii)  that]  AND (II) tenants are not required to provide
any information regarding their income except that which is requested on
the form and may contain  such  other  information  the  division  deems
appropriate.  The  tenant  or tenants shall return the completed certif-
ication to the owner within thirty days after service upon the tenant or
tenants. In the event that the total AVERAGE annual income as  certified
is  in  excess of one hundred seventy-five thousand dollars in each such
year, the owner may file the certification with the  state  division  of
housing  and community renewal on or before June thirtieth of such year.
Upon filing such certification with the division,  the  division  shall,
within  thirty days after the filing, issue an order providing that such
housing accommodation shall not be subject to  the  provisions  of  this
[act]  LAW  upon  the  expiration  of the existing lease. A copy of such

S. 5047                             8

order shall be mailed by regular  and  certified  mail,  return  receipt
requested,  to  the tenant or tenants and a copy thereof shall be mailed
to the owner.   NOTWITHSTANDING THE FOREGOING, THE  PROVISIONS  OF  THIS
SECTION  SHALL  NOT  APPLY TO ANY TENANT WHOSE RENT IS PAYABLE BY DIRECT
GOVERNMENT  HOUSING  SUBSIDY,  ANY  CURRENTLY  EFFECTIVE  RENT  INCREASE
EXEMPTION  FOR  SENIOR  CITIZENS OR PERSONS WITH DISABILITIES AUTHORIZED
PURSUANT  TO  SECTION  FOUR  HUNDRED  SIXTY-SEVEN-B  OR   FOUR   HUNDRED
SIXTY-SEVEN-C  OF THE REAL PROPERTY TAX LAW, DIRECT PAYMENT OF RENT OR A
TWO-PARTY CHECK ISSUED BY A SOCIAL SERVICES DISTRICT OR  THE  DEPARTMENT
OF  FAMILY  ASSISTANCE, OR RENTAL ASSISTANCE THAT IS PAYABLE PURSUANT TO
COURT ORDERS ISSUED IN LITIGATION COMMENCED IN NINETEEN HUNDRED  EIGHTY-
SEVEN  IN  A  PROCEEDING  IN WHICH THE AMOUNT OF SHELTER ALLOWANCE IS AT
ISSUE ON BEHALF OF RECIPIENTS OF AID TO DEPENDENT CHILDREN.
  (c) 1. In the event that the tenant or tenants either fail  to  return
the  completed certification to the owner on or before the date required
by subdivision (b) of this section or the  owner  disputes  the  certif-
ication  returned  by the tenant or tenants, the owner may, on or before
June thirtieth of such year, petition the state division of housing  and
community  renewal  to  verify, pursuant to section one hundred seventy-
one-b of the tax law, whether the total AVERAGE  annual  income  exceeds
one  hundred  seventy-five  thousand  dollars  [in  each of] FOR the two
preceding calendar years. Within twenty days after the  filing  of  such
request  with  the  division,  the  division  shall notify the tenant or
tenants named on the lease that such tenant or tenants must provide  the
division  with  such  information  as the division and the department of
taxation and finance shall require to verify whether the  total  AVERAGE
annual  income exceeds one hundred seventy-five thousand dollars in each
such year. The division's  notification  shall  require  the  tenant  or
tenants  to provide the information to the division within sixty days of
service upon such tenant or tenants and shall include a warning in  bold
faced  type that failure to respond will result in an order being issued
by the division providing that such housing accommodation shall  not  be
subject to the provisions of this law.
  2. If the department of taxation and finance determines that the total
AVERAGE  annual income is in excess of one hundred seventy-five thousand
dollars [in each of] FOR the two preceding calendar years, the  division
shall,  on  or  before November fifteenth of such year, notify the owner
and tenants of the results of such verification. Both the owner and  the
tenants shall have thirty days within which to comment on such verifica-
tion  results.    Within  forty-five  days  after  the expiration of the
comment period, the division shall, where appropriate,  issue  an  order
providing  that  such  housing accommodation shall not be subject to the
provisions of this law upon the expiration of the existing lease. A copy
of such order shall be mailed by  regular  and  certified  mail,  return
receipt  requested, to the tenant or tenants and a copy thereof shall be
sent to the owner.   WHERE THE DEPARTMENT OF  TAXATION  AND  FINANCE  IS
UNABLE TO DETERMINE WHETHER THE TOTAL AVERAGE ANNUAL INCOME IS IN EXCESS
OF  ONE  HUNDRED  SEVENTY-FIVE  THOUSAND  DOLLARS  FOR THE TWO PRECEDING
CALENDAR YEARS, IT SHALL BE  PRESUMED  THAT  THE  TOTAL  AVERAGE  ANNUAL
INCOME  OF SUCH TENANT IS IN EXCESS OF ONE HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS FOR THE TWO PRECEDING CALENDAR YEARS AND THE PROCEDURES OF  THIS
PARAGRAPH SHALL APPLY TO SUCH TENANT. THE DIVISION OF HOUSING AND COMMU-
NITY  RENEWAL SHALL PROMULGATE REGULATIONS WHICH SET FORTH THE MANNER IN
WHICH SUCH A TENANT MAY REBUT SUCH PRESUMPTION.
  3. In the event the tenant or tenants fail to provide the  information
required  pursuant  to  paragraph  one of this subdivision, the division

S. 5047                             9

shall issue, on or before December first of such year, an order  provid-
ing  that  such  housing  accommodation  shall  not  be  subject  to the
provisions of this law upon the expiration of the current lease. A  copy
of  such  order  shall  be  mailed by regular and certified mail, return
receipt requested, to the tenant or tenants and a copy thereof shall  be
sent to the owner.
  4.  The  provisions  of the state freedom of information act shall not
apply to any income information obtained by  the  division  pursuant  to
this section.
  (d) This section shall apply only to section 26-504.1 of this code.
  (e)  Upon receipt of such order of decontrol pursuant to this section,
an owner shall offer the housing accommodation subject to such order  to
the  tenant  at  a  rent not in excess of the market rent, which for the
purposes of this section means a rent  obtainable  in  an  arm's  length
transaction.  Such rental offer shall be made by the owner in writing to
the tenant by certified and regular mail and  shall  inform  the  tenant
that  such offer must be accepted in writing within ten days of receipt.
The tenant shall respond within ten days after receipt of such offer. If
the tenant declines the offer or fails to respond  within  such  period,
the  owner may commence an action or proceeding for the eviction of such
tenant.
  S 7. Subparagraph (j) of paragraph  2  of  subdivision  e  of  section
26-403 of the administrative code of the city of New York, as amended by
chapter 116 of the laws of 1997, is amended to read as follows:
  (j)  Upon the issuance of an order of decontrol by the division, hous-
ing accommodations which[: (1)] are occupied by persons who have a total
AVERAGE annual income in excess of  one  hundred  seventy-five  thousand
dollars  per annum [in each of] FOR the two preceding calendar years, as
defined in and subject to the  limitations  and  process  set  forth  in
section  26-403.1  of  this chapter[; and (2) have a maximum rent of two
thousand dollars or more per month]. Provided however, that this  exclu-
sion  shall  not  apply to housing accommodations which became or become
subject to this law by virtue of  receiving  tax  benefits  pursuant  to
section four hundred eighty-nine of the real property tax law.
  S  8.  Section  26-403.1 of the administrative code of the city of New
York, as added by chapter 253 of the laws of 1993, subdivision  (b)  and
paragraphs  1 and 2 of subdivision (c) as amended and subdivision (e) as
added by chapter 116 of the laws of 1997, is amended to read as follows:
  S 26-403.1 High income  rent  decontrol.  (a)  For  purposes  of  this
section, annual income shall mean the federal [adjusted] gross income as
reported  on  the  New York state income tax return. Total annual income
means the sum of the annual incomes of all persons who occupy the  hous-
ing  accommodation  as their primary residence other than on a temporary
basis, excluding bona fide employees of such occupants residing  therein
in connection with such employment and excluding bona fide subtenants in
occupancy pursuant to the provisions of section two hundred twenty-six-b
of  the  real property law. In the case where a housing accommodation is
sublet, the annual income of the sublessor shall be considered.
  (b) On or before the first day of May in each calendar year, the owner
of each housing accommodation [for which the maximum rent is  two  thou-
sand dollars or more per month] WHICH IS OCCUPIED BY A TENANT OR TENANTS
WHOM  THE OWNER IN GOOD FAITH BELIEVES HAS A TOTAL AVERAGE ANNUAL INCOME
IN EXCESS OF ONE HUNDRED  SEVENTY-FIVE  THOUSAND  DOLLARS  FOR  THE  TWO
PRECEDING  CALENDAR  YEARS  may  provide  the tenant or tenants residing
therein with an income certification form prepared by  the  division  of
housing  and  community  renewal  on  which such tenant or tenants shall

S. 5047                            10

identify all persons referred to in subdivision (a) of this section  and
shall  certify  whether  the total AVERAGE annual income is in excess of
one hundred seventy-five thousand dollars  [in  each]  FOR  of  the  two
preceding  calendar  years.  Such  income certification form shall state
that the income level certified to by  the  tenant  may  be  subject  to
verification  by  the  department  of  taxation  and finance pursuant to
section one hundred seventy-one-b of the tax law and shall  not  require
disclosure  of  any  income information other than whether the aforemen-
tioned threshold has been exceeded. Such income certification form shall
clearly state that: (i) [only tenants residing in housing accommodations
which have a maximum rent of two thousand dollars or more per month  are
required  to  complete  the  certification form; (ii) that] tenants have
protections available to them which are designed to prevent  harassment;
[(iii)  that]  AND (II) tenants are not required to provide any informa-
tion regarding their income except that which is requested on  the  form
and  may  contain such other information the division deems appropriate.
The tenant or tenants shall return the completed  certification  to  the
owner  within  thirty  days after service upon the tenant or tenants. In
the event that the total AVERAGE annual income as certified is in excess
of one hundred seventy-five thousand dollars  in  each  such  year,  the
owner  may file the certification with the state division of housing and
community renewal on or before June thirtieth of such year. Upon  filing
such  certification with the division, the division shall, within thirty
days after the filing, issue an order of decontrol providing  that  such
housing  accommodations  shall  not be subject to the provisions of this
law as of the first day of June in the year next succeeding  the  filing
of  the certification by the owner. A copy of such order shall be mailed
by regular and certified mail, return receipt requested, to  the  tenant
or  tenants  and  a copy thereof shall be mailed to the owner.  NOTWITH-
STANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION SHALL  NOT  APPLY
TO  ANY TENANT WHOSE RENT IS PAYABLE BY DIRECT GOVERNMENT HOUSING SUBSI-
DY, ANY CURRENTLY EFFECTIVE RENT INCREASE EXEMPTION FOR SENIOR  CITIZENS
OR PERSONS WITH DISABILITIES AUTHORIZED PURSUANT TO SECTION FOUR HUNDRED
SIXTY-SEVEN-B  OR  FOUR  HUNDRED  SIXTY-SEVEN-C OF THE REAL PROPERTY TAX
LAW, DIRECT PAYMENT OF RENT OR A TWO-PARTY  CHECK  ISSUED  BY  A  SOCIAL
SERVICES  DISTRICT  OR  THE  DEPARTMENT  OF FAMILY ASSISTANCE, OR RENTAL
ASSISTANCE THAT IS PAYABLE PURSUANT TO COURT ORDERS ISSUED IN LITIGATION
COMMENCED IN NINETEEN HUNDRED EIGHTY-SEVEN IN A PROCEEDING IN WHICH  THE
AMOUNT  OF  SHELTER ALLOWANCE IS AT ISSUE ON BEHALF OF RECIPIENTS OF AID
TO DEPENDENT CHILDREN.
  (c) 1. In the event that the tenant or tenants either fail  to  return
the  completed certification to the owner on or before the date required
by subdivision (b) of this section or the  owner  disputes  the  certif-
ication  returned  by the tenant or tenants, the owner may, on or before
June thirtieth of such year, petition the state division of housing  and
community  renewal  to  verify, pursuant to section one hundred seventy-
one-b of the tax law, whether the total AVERAGE  annual  income  exceeds
one  hundred  seventy-five  thousand  dollars  [in  each of] FOR the two
preceding calendar years. Within twenty days after the  filing  of  such
request  with  the  division,  the  division  shall notify the tenant or
tenants that such tenant or tenants must provide the division with  such
information  as  the division and the department of taxation and finance
shall require to verify whether the total AVERAGE annual income  exceeds
one  hundred  seventy-five thousand dollars in each such year. The divi-
sion's notification shall require the tenant or tenants to  provide  the
information  to  the  division  within  sixty  days of service upon such

S. 5047                            11

tenant or tenants and shall include a warning in bold  faced  type  that
failure  to respond will result in an order of decontrol being issued by
the division for such housing accommodation.
  2. If the department of taxation and finance determines that the total
AVERAGE  annual income is in excess of one hundred seventy-five thousand
dollars [in each of] FOR the two preceding calendar years, the  division
shall,  on  or  before November fifteenth of such year, notify the owner
and tenants of the results of such verification. Both the owner and  the
tenants shall have thirty days within which to comment on such verifica-
tion  results.    Within  forty-five  days  after  the expiration of the
comment period, the division shall, where appropriate, issue an order of
decontrol providing that such housing accommodation shall not be subject
to the provisions of this law as of the first day of March in  the  year
next  succeeding the filing of the owner's petition with the division. A
copy of such order shall be mailed by regular and certified mail, return
receipt requested, to the tenant or tenants and a copy thereof shall  be
sent  to  the  owner.    WHERE THE DEPARTMENT OF TAXATION AND FINANCE IS
UNABLE TO DETERMINE WHETHER THE TOTAL AVERAGE ANNUAL INCOME IS IN EXCESS
OF ONE HUNDRED SEVENTY-FIVE  THOUSAND  DOLLARS  FOR  THE  TWO  PRECEDING
CALENDAR  YEARS,  IT  SHALL  BE  PRESUMED  THAT THE TOTAL AVERAGE ANNUAL
INCOME OF SUCH TENANT IS IN EXCESS OF ONE HUNDRED SEVENTY-FIVE  THOUSAND
DOLLARS  FOR THE TWO PRECEDING CALENDAR YEARS AND THE PROCEDURES OF THIS
PARAGRAPH SHALL APPLY TO SUCH TENANT. THE DIVISION OF HOUSING AND COMMU-
NITY RENEWAL SHALL PROMULGATE REGULATIONS WHICH SET FORTH IN THE  MANNER
IN WHICH SUCH A TENANT MAY REBUT SUCH PRESUMPTION.
  3.  In the event the tenant or tenants fail to provide the information
required pursuant to paragraph one of  this  subdivision,  the  division
shall  issue,  on  or  before  December  first of such year, an order of
decontrol providing that such housing accommodation shall not be subject
to the provisions of this law as of the first day of March in  the  year
next  succeeding  the  last  day  on  which  the  tenant or tenants were
required to provide the information required by such paragraph.  A  copy
of  such  order  shall  be  mailed by regular and certified mail, return
receipt requested, to the tenant or tenants and a copy thereof shall  be
sent to the owner.
  4.  The  provisions  of the state freedom of information act shall not
apply to any income information obtained by  the  division  pursuant  to
this section.
  (d) This section shall apply only to subparagraph (j) of paragraph two
of subdivision e of section 26-403 of this code.
  (e)  Upon receipt of such order of decontrol pursuant to this section,
an owner shall offer the housing accommodation subject to such order  to
the  tenant  at  a  rent not in excess of the market rent, which for the
purposes of this section means a rent  obtainable  in  an  arm's  length
transaction.  Such rental offer shall be made by the owner in writing to
the tenant by certified and regular mail and  shall  inform  the  tenant
that  such offer must be accepted in writing within ten days of receipt.
The tenant shall respond within ten days after receipt of such offer. If
the tenant declines the offer or fails to respond  within  such  period,
the  owner may commence an action or proceeding for the eviction of such
tenant.
  S 9. This act shall take effect immediately and shall first  apply  to
income  certification  forms  provided  by owners to tenants on or after
January 1, 2012, provided that:
  (a) the amendments to the emergency tenant protection act of  nineteen
seventy-four  made  by  sections one and two of this act shall expire on

S. 5047                            12

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;
  (b)  the  amendments to the emergency housing rent control law made by
sections three and four of this act shall expire on  the  same  date  as
such  law  expires  and  shall  not affect the expiration of such law as
provided in subdivision 2 of section 1 of chapter 274  of  the  laws  of
1946;
  (c) the amendments to chapter 4 of title 26 of the administrative code
of  the city of New York made by sections five and six 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
  (d)  the  amendments  to  the city rent and rehabilitation law made by
sections seven and eight of this act shall  remain  in  full  force  and
effect only as 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.

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