S T A T E   O F   N E W   Y O R K
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                                  4236

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 2, 2011
                               ___________

Introduced  by  M.  of  A.  BRENNAN,  JAFFEE, HOYT, ROBINSON, ROSENTHAL,
  CAMARA,  PERRY,  P. RIVERA,  SCARBOROUGH,  BOYLAND,  MAISEL,   HOOPER,
  CASTRO,  N. RIVERA -- Multi-Sponsored by -- M. of A. BING, BROOK-KRAS-
  NY, CAHILL, CLARK, GLICK, GOTTFRIED, HEASTIE, JACOBS, JEFFRIES,  KELL-
  NER,  LUPARDO, MAGNARELLI, MAYERSOHN, MILLMAN, ORTIZ, PAULIN, PHEFFER,
  REILLY, J. RIVERA, TITUS, TOWNS, WEISENBERG, WRIGHT -- read  once  and
  referred to the Committee on Housing

AN  ACT  to  amend the public authorities law, in relation to increasing
  the bond limit of the state  of  New  York  mortgage  agency  for  the
  purpose of refinancing subprime loans at risk of foreclosure

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

  Section 1. Section 2407 of the public authorities law, as  amended  by
chapter 218 of the laws of 2010, is amended to read as follows:
  S  2407.  Bond limits. (1) Except for notes issued in nineteen hundred
seventy and nineteen hundred seventy-one, the  agency  shall  not  issue
bonds  and  notes,  the  interest  on which is not included in the gross
income of the holders of the bonds and notes  under  the  United  States
Internal Revenue Code of 1986, as amended, or any subsequent correspond-
ing internal revenue law of the United States, in an aggregate principal
amount  exceeding  [nine]  TWELVE  billion  two  hundred  twenty million
dollars, excluding from such limitation  (a)  an  amount  equal  to  any
original  issue discount from the principal amount of any bonds or notes
issued, (b) bonds and notes  issued  to  refund  outstanding  bonds  and
notes,  and  (c)  bonds and notes not described in paragraph (b) of this
subdivision issued to refund outstanding bonds and notes  in  accordance
with  the  provisions  of  the  Internal Revenue Code of 1986 or the Tax
Reform Act of 1986, as amended,  where  such  bonds  or  notes  are  not
included  in  the  statewide  volume  cap on private purpose bonds under
section 146 of such code provided,  however,  that  upon  any  refunding
pursuant  to  this  paragraph or paragraph (b) of this subdivision, such

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08077-01-1
              

A. 4236                             2

exclusion shall apply only to the extent that the amount of the  refund-
ing  bonds  or  notes  does not exceed (i) the outstanding amount of the
refunded bonds or notes, plus (ii) to the extent permitted by applicable
federal tax law, costs of issuance of the refunding bonds or notes to be
financed  from  the  proceeds  of the refunding bonds or notes.  No such
bond or note shall be issued by the agency on or after  July  sixteenth,
two  thousand  eleven,  excluding  bonds  and  notes  issued  to  refund
outstanding bonds and notes. No more than five hundred  million  dollars
of  proceeds  of  bonds  or  notes issued by the agency pursuant to this
subdivision shall  be  used  for  mortgage  purposes  by  blending  with
proceeds of bonds issued pursuant to subdivision two of this section.
  (2)  In  connection  with  the  issuance  of  bonds for the purpose of
furthering programs described in this title, the agency is authorized to
covenant and consent that the interest on any of  its  bonds,  notes  or
other  obligations shall be includable, under the United States Internal
Revenue Code of 1986, as amended or any subsequent corresponding  inter-
nal revenue law of the United States, in the gross income of the holders
of the bonds to the same extent and in the same manner that the interest
on  bills,  bonds,  notes  or  other obligations of the United States is
includable in the gross income of the holders thereof under said  Inter-
nal  Revenue  Code or any such subsequent law. Pursuant to this subdivi-
sion, the agency shall not issue bonds, notes or other obligations in an
aggregate principal amount  exceeding  eight  hundred  million  dollars,
excluding  from such limitation bonds, notes or other obligations issued
to refund outstanding bonds, notes or other obligations. No  such  bond,
note  or other obligation shall be issued by the agency on or after July
sixteenth, two thousand eleven, excluding bonds, notes  or  other  obli-
gations  issued  to refund outstanding bonds, notes or other obligations
and no mortgages shall be purchased with the  proceeds  of  such  bonds,
notes  or  other  obligations after such date. The board of directors of
the agency shall establish program guidelines  for  purposes  of  bonds,
notes  or  other  obligations  issued  pursuant to this subdivision. The
board of directors shall establish from  time  to  time  maximum  income
limits of persons eligible to receive mortgages financed by bonds, notes
or  other  obligations issued pursuant to this subdivision, which income
limits with respect to one-third of the total principal amount of  mort-
gages  authorized to be so financed shall not exceed one hundred twenty-
five percent of the latest maximum income  limits  permitted  under  the
Internal  Revenue  Code  of 1986, as amended, for mortgagors financed by
mortgage revenue bonds, with respect  to  one-third  of  such  principal
amount  authorized to be so financed, shall not exceed one hundred thir-
ty-five percent of such income limits, and with respect to one-third  of
such principal amount authorized to be so financed, shall not exceed one
hundred fifty percent of such limits.
  (3)  The fixing of the statutory maximums in this section shall not be
construed as constituting a contract between the agency and the  holders
of  its bonds or notes that additional bonds and notes may not be issued
subsequently by the agency in the event  that  such  statutory  maximums
shall subsequently be increased by law.
  (4)  THE  THREE  BILLION  DOLLARS  ADDED TO THE BOND CAP PURSUANT TO A
CHAPTER OF THE LAWS OF TWO THOUSAND ELEVEN WHICH ADDED THIS  SUBDIVISION
SHALL BE USED FOR THE PURPOSES OF REFINANCING SUBPRIME MORTGAGES AT RISK
OF  FORECLOSURE.  THE AGENCY IS HEREBY AUTHORIZED AND DIRECTED TO ESTAB-
LISH CRITERIA FOR DEFINING THE TERM "SUBPRIME MORTGAGE" AS  SUCH  AGENCY
DETERMINES TO BE NECESSARY.
  S 2. This act shall take effect immediately.