Senate Bill S5150

2011-2012 Legislative Session

Provides for decontrol of rent regulated housing accommodations when total average annual income over two calendar years exceeds $175,000 and rent exceeds $1,500

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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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 04, 2012	referred to housing, construction and community development
May 03, 2011	referred to housing, construction and community development

2011-S5150 (ACTIVE) - 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, Emerg Hous Rent Cont L; amd §§26-504.1, 26-504.3, 26-403 & 26-403.1, NYC Ad Cd

2011-S5150 (ACTIVE) - Summary

Provides for decontrol of rent regulated housing accommodations when total average annual income over two calendar years exceeds $175,000 and the monthly rent for the rent regulated housing accommodation exceeds $1,500.

2011-S5150 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5150

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 rent threshold for 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:
This bill would lower the rent threshold used as part of the high
income/high rent deregulation laws that apply to rent regulated
tenants.
The rent threshold would be lowered from a legal regulated rent of
$2,000 per month to $1,500 per month. 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.
Lastly, where the State Department of Taxation and Finance is unable

to locate a tenant's State tax records, the burden of proof will be
upon the tenant to establish that their income for the period of
review was less than $175.

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.

High-rent/high-income deregulation 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 exceeded
$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 act to protect
these tenants. The law should ensure that as many high-income tenants
as possible do not receive the benefits of rent regulation.

An irrational 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 reduced to $1500 to
expand the universe of high-income tenants who are subject to
high-income/high rent deregulation. 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.

2011-S5150 (ACTIVE) - Bill Text download pdf

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

                                  5150

                       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  rent  threshold  for
  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 accommodations
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 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 proper-
ty tax law, or (b) by virtue of article seven-C of the multiple 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.
                                                           LBD10129-02-1

S. 5150                             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]  ONE  thousand  FIVE HUNDRED dollars or more per month 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 pursu-
ant to section one hundred seventy-one-b of the tax law, and  shall  not
require  disclosure  of any 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  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 harass-
ment; (iii) that 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 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 commu-
nity  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 accommo-
dation shall not be subject to the provisions of this act upon the expi-
ration 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.
  (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

S. 5150                             3

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  STATE  DIVISION  OF  HOUSING  AND  COMMUNITY
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 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.    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 STATE DIVISION OF HOUSING  AND
COMMUNITY  RENEWAL  SHALL  PROMULGATE  REGULATIONS  WHICH  SET FORTH THE
MANNER IN WHICH SUCH A TENANT MAY REBUT SUCH PRESUMPTION.
  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 twelve of subdivision a
of section five of this act.

S. 5150                             4

  (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] ONE
thousand FIVE HUNDRED 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] ONE
thousand FIVE HUNDRED dollars or more per month 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 pursu-
ant  to  section  one hundred seventy-one-b of the tax law and shall not
require disclosure of any income  information  other  than  whether  the
aforementioned  threshold  has  been exceeded. Such income certification
form shall clearly state that: (i)  only  tenants  residing  in  housing
accommodations  which  had  a  maximum  rent  of [two] ONE thousand FIVE
HUNDRED dollars or more per month are required to complete  the  certif-
ication form; (ii) that tenants have protections available to them which
are  designed to prevent harassment; (iii) that tenants are not required

S. 5150                             5

to provide any information regarding their income except that  which  is
requested  on  the form and may contain such other information the divi-
sion 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 divi-
sion 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.
  (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-
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 STATE DIVISION OF HOUSING AND

S. 5150                             6

COMMUNITY 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] ONE thousand FIVE HUNDRED dollars or more per month.
Provided, however, that this exclusion shall not apply to housing accom-
modations  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 eighty-nine of the real property tax law, except as other-
wise 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-

S. 5150                             7

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] ONE thousand FIVE HUNDRED dollars or more per  month  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 pursu-
ant  to  section  one hundred seventy-one-b of the tax law and shall not
require disclosure of any income  information  other  than  whether  the
aforementioned  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)] AND (II) that 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  divi-
sion 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 divi-
sion shall, within thirty days after the filing, issue an order  provid-
ing  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.
  (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

S. 5150                             8

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, BASED UPON THE INFORMATION CONTAINED IN THE INFOR-
MATION PROVIDED BY THE TENANT, 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  STATE  DIVISION  OF
HOUSING  AND  COMMUNITY  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  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

S. 5150                             9

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]
ONE thousand FIVE HUNDRED dollars or more per month.  Provided  however,
that  this  exclusion  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]  ONE
thousand  FIVE  HUNDRED dollars or more per month 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 pursu-
ant to section one hundred seventy-one-b of the tax law  and  shall  not
require  disclosure  of  any  income  information other than whether the
aforementioned 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)]  AND  (II) that 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 of decontrol provid-
ing  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

S. 5150                            10

requested,  to  the tenant or tenants and a copy thereof shall be mailed
to the owner.
  (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-
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, BASED UPON THE INFORMATION CONTAINED IN THE  INFOR-
MATION  PROVIDED  BY THE TENANT, 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 STATE DIVISION OF
HOUSING AND COMMUNITY 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.

S. 5150                            11

  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
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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Senate Bill S5150

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

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Sponsored By

Catharine Young

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

Actions

2011-S5150 (ACTIVE) - Details

2011-S5150 (ACTIVE) - Summary

2011-S5150 (ACTIVE) - Sponsor Memo

2011-S5150 (ACTIVE) - Bill Text download pdf

Comments