senate Bill S3167

2013-2014 Legislative Session

Provides that upon sale of a limited-profit housing company project, reserve and surplus funds must be held in escrow and dedicated to major capital improvements

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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 08, 2014 referred to housing, construction and community development
Jan 31, 2013 referred to housing, construction and community development

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S3167 - Bill Details

See Assembly Version of this Bill:
A2833
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Private Housing Finance Law
Laws Affected:
Add ยง36-b, Priv Hous Fin L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S444, A1853
2009-2010: S3850, A1287

S3167 - Bill Texts

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Provides that upon sale or other conveyance of a limited-profit housing company project to an entity other than a new limited-profit housing company, reserve and surplus funds must be held in escrow by the new owner and dedicated solely to defraying the costs of major capital improvements; further provides that no rental may be increased to cover the cost of a major capital improvement until such reserve and surplus funds have been exhausted.

view sponsor memo
BILL NUMBER:S3167

TITLE OF BILL: An act to amend the private housing finance law, in
relation to the sale of limited-profit housing projects

PURPOSE OR GENERAL IDEA OF BILL: This bill provides that upon sale of a
limited-profit housing company project, reserve and surplus funds must
be held in escrow and dedicated to major capital improvements.

SUMMARY OF SPECIFIC PROVISIONS: The bill amends the Private Housing
Finance Law (PHFL) by adding a new section 36-b. That new section
provides that if a limited profit housing company incorporated under
Article II of the PHFL sells a project to any entity other than a limit-
ed-profit housing company, then all reserve and surplus funds trans-
ferred to the new owner must be held in escrow for the purpose of making
major capital improvements to the project. The bill further provides
that the new owner may not increase rents or other charges, based on new
capital improvements, until after the reserve and surplus funds held in
escrow have been exhausted.

JUSTIFICATION: The Mitchell-Lama program was established to create
affordable housing and guarantee developer profits of 6% on investments.
In the event of buyouts by owners of Mitchell-Lama developments, owners
of limited profit housing companies might transfer reserve or surplus
monies to the private sector, and those funds could - without the
provisions contained in this bill- be used in a manner contrary to the
spirit and purpose of the Mitchell-Lama program and the law creating it.

In order to ensure that monies which rightfully belong to residents in
limited profit housing companies are used to improve those buildings,
this bill would require that reserve or surplus funds be placed in an
escrow account if a housing company opts to buyout of the Mitchell-Lama
program, and limits the purpose for which the funds held in escrow may
be used.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect on the first of January next
succeeding the date on which it shall have become a law.

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

                                  3167

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 31, 2013
                               ___________

Introduced  by  Sen. KRUEGER -- 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 private housing finance law, in relation to the sale
  of limited-profit housing projects

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

  Section 1. The private housing finance law is amended by adding a  new
section 36-b to read as follows:
  S  36-B.  SALE  OR  OTHER  CONVEYANCE  OF PROJECT. NOTWITHSTANDING ANY
INCONSISTENT PROVISION OF LAW, UPON THE SALE OR OTHER  CONVEYANCE  OF  A
PROJECT  BY  A COMPANY TO ANY ENTITY OTHER THAN A COMPANY, THE FOLLOWING
REQUIREMENTS SHALL APPLY.
  1. ALL RESERVE AND SURPLUS FUNDS TRANSFERRED BY THE COMPANY TO THE NEW
OWNER MUST BE HELD BY SUCH NEW OWNER IN ESCROW ACCOUNTS AND MAY BE  USED
BY  SUCH  NEW  OWNER  SOLELY  FOR  THE  PURPOSE  OF MAKING MAJOR CAPITAL
IMPROVEMENTS TO THE PROJECT.
  2. NO RENTAL OR OTHER CHARGE MAY BE INCREASED  BY  THE  NEW  OWNER  TO
DEFRAY THE COST OF ANY MAJOR CAPITAL IMPROVEMENT UNLESS AND UNTIL ALL OF
SUCH  RESERVE AND SURPLUS FUNDS HAVE BEEN EXPENDED TO DEFRAY THE COST OF
MAJOR CAPITAL IMPROVEMENTS.
  S 2. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.



 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00805-01-3

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