senate Bill S6642

2013-2014 Legislative Session

Relates to creating the New York state home ownership savings plan and creating a property tax exemption related thereto

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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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Feb 21, 2014 referred to finance

S6642 - Bill Details

Current Committee:
Senate Finance
Law Section:
State Finance Law
Laws Affected:
Add §97-j, St Fin L; add §421-n, RPT L

S6642 - Bill Texts

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Relates to creating the New York state home ownership savings plan and creating a property tax exemption related thereto.

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BILL NUMBER:S6642

TITLE OF BILL: An act to amend the state finance law and the real
property tax law, in relation to creating the New York state home
ownership savings plan and creating a property tax exemption relating
thereto

PURPOSE OR GENERAL IDEA OF BILL:

This bill relates to creating the New York state home ownership
savings plan and creating a property tax exemption related thereto.

SUMMARY OF PROVISIONS:

Section 1 establishes the title of the legislation as the "New York
State Home Ownership Savings Plan".

Section 2 amends the state finance law by adding a new section, 97-j,
that states the legislative intent, defines important terms and
provides guidance for implementation.

Section 3 amends the real property tax law by adding a new section,
421-n, that creates exemptions for prosperities purchased in target
areas with a New York state home ownership savings plan.

JUSTIFICATION:

In recent years, homeownership in New York has declined to rates not
seen since the Great Depression. The declines are particularly
concentrated among younger households, with many young people delaying
property purchases for a variety of reasons.

Furthermore, according to the 2010 Census, New York State has the
lowest percentage of homeowners in the United States. This is the
second consecutive census in which New York has had the lowest rate.
Only 53 percent of the population owned a home compared to the
national rate of 65.1 percent.

Home ownership can confer significant benefits for individuals and
communities. Owning a home can result in increased health and
education benefits, increased civic involvement, reduced crime and
higher lifetime wealth. Owning a residence also leads to higher tax
revenues, reclamation of distressed neighborhoods and census tracts,
and renovation of abandoned and/or vacant buildings. Therefore it is
in the interest of the state to continue offering opportunities for
individuals to purchase homes.

In a manner similar to the New York College Savings Program, and the
Ontario home buyer's savings plan, this plan would offer potential
home buyers a tax-advantaged opportunity to save their money and buy a
home. It is expected this program will become immensely popular in New
York because, like Independent Retirement Accounts (IRAs), this new
program would empower average New Yorkers in rural, suburban and urban
to join in the American Dream of owning a home.

PRIOR LEGISLATIVE HISTORY:


This is a new bill.

FISCAL IMPLICATIONS:

There will be no discernible fiscal impact in the initial years of
this program. It is expected that returning distressed properties to
the tax rolls and developing distressed census tracts will provide new
revenue to the state fisc.

EFFECTIVE DATE:

This shall take effect immediately.

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

                                  6642

                            I N  S E N A T E

                            February 21, 2014
                               ___________

Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Finance

AN ACT to amend the state finance law and the real property tax law,  in
  relation  to  creating  the New York state home ownership savings plan
  and creating a property tax exemption relating thereto

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

  Section  1.  This act shall be known and may be cited as the "New York
state home ownership savings plan".
  S 2. The state finance law is amended by adding a new section 97-j  to
read as follows:
  S  97-J.  1.  THE PURPOSE OF THE NEW YORK STATE HOME OWNERSHIP SAVINGS
PLAN IS TO ATTRACT INDIVIDUALS TO RESIDE AND  REMAIN  IN  THE  STATE  BY
AUTHORIZING  THE  ESTABLISHMENT  OF  HOME OWNERSHIP SAVINGS ACCOUNTS AND
PROVIDING GUIDELINES FOR THE MAINTENANCE OF SUCH ACCOUNTS  IN  ORDER  TO
ENABLE  INDIVIDUALS  AND  COUPLES  TO RECEIVE A REFUNDABLE TAX CREDIT TO
HELP THEM SAVE TOWARD THE PURCHASE OF A FIRST HOME IN NEW YORK STATE.
  2. AS USED IN THIS SECTION:
  (A) "ASSETS OF THE PLAN" MEANS ALL CONTRIBUTIONS MADE INTO  THE  PLAN,
ANY  TRANSFERS  MADE  INTO  THE  PLAN  UNDER THIS SECTION AND ALL INCOME
EARNED THEREFROM AND ON ASSETS SUBSTITUTED THEREFOR, WHETHER OR NOT  THE
ASSETS OF THE PLAN ARE IN THE FORM OF QUALIFIED INVESTMENTS.
  (B)  "COUPLE"  MEANS INDIVIDUALS WHO HAVE COHABITED FOR A PERIOD OF AT
LEAST FIVE YEARS IN A CONJUGAL RELATIONSHIP REGARDLESS OF  WHETHER  THEY
ARE MARRIED.
  (C) "COMPTROLLER" MEANS THE COMPTROLLER OF THE STATE OF NEW YORK.
  (D)  "CONTRIBUTION" MEANS THE AMOUNT OF MONEY PAID BY AN INDIVIDUAL TO
A FINANCIAL ORGANIZATION AS A PAYMENT  INTO  A  HOME  OWNERSHIP  SAVINGS
PLAN.
  (E)  "FINANCIAL ORGANIZATION" MEANS A FINANCIAL INSTITUTION AUTHORIZED
TO DO BUSINESS IN THE STATE OF NEW YORK AND (I) WHICH IS  AN  AUTHORIZED
FIDUCIARY  TO  ACT  AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF
CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF  1974"  AS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13698-02-4

S. 6642                             2

SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPA-
NY; AND
  (II)  (1)  IS  LICENSED  OR  CHARTERED  BY THE DEPARTMENT OF FINANCIAL
SERVICES;
  (2) IS CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT;
  (3) IS SUBJECT TO THE JURISDICTION AND REGULATION  OF  THE  SECURITIES
AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT; OR
  (4) IS ANY OTHER ENTITY OTHERWISE AUTHORIZED TO ACT IN THIS STATE AS A
TRUSTEE  PURSUANT  TO  THE  PROVISIONS  OF  AN  ACT OF CONGRESS ENTITLED
"EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY
BE AMENDED FROM TIME TO TIME.
  (F) "HOMEOWNERSHIP SAVINGS PLAN" MEANS AN ARRANGEMENT ENTERED INTO  BY
AN  INDIVIDUAL  AND A FINANCIAL ORGANIZATION UNDER WHICH PAYMENT IS MADE
BY THE INDIVIDUAL TO THE FINANCIAL ORGANIZATION OF AN AMOUNT OF MONEY AS
A PAYMENT UNDER THE  ARRANGEMENT  TO  BE  USED,  INVESTED  OR  OTHERWISE
APPLIED  BY  THE  FINANCIAL ORGANIZATION FOR THE PURPOSE OF PROVIDING TO
THE INDIVIDUAL AS THE PLANHOLDER UNDER  THE  ARRANGEMENT  AN  AMOUNT  OF
MONEY  TO  BE USED BY THE INDIVIDUAL FOR THE PURCHASE BY HIM OR HER OF A
QUALIFYING ELIGIBLE HOME.
  (G) "INDIVIDUAL" MEANS A PERSON OTHER THAN A TRUST OR  CORPORATION  AS
DEFINED BY THE TAX LAW.
  (H)  "PLANHOLDER" MEANS AN INDIVIDUAL EIGHTEEN YEARS OF AGE OR OVER TO
WHOM, UNDER THE PLAN, A SINGLE PAYMENT IS AGREED TO BE PAID.  PLANHOLDER
DOES  NOT INCLUDE AN INDIVIDUAL TO WHOM UNDER A PLAN A SINGLE PAYMENT IS
AGREED TO BE PAID AS A CONSEQUENCE OF THE DEATH OF ANOTHER INDIVIDUAL.
  (I) "ELIGIBLE HOME" MEANS:
  (I) A DETACHED HOUSE;
  (II) A SEMI-DETACHED HOUSE;
  (III) A TOWNHOUSE;
  (IV) A SHARE OR SHARES OF THE CAPITAL STOCK OF A  CO-OPERATIVE  CORPO-
RATION  IF THE SHARE OR SHARES ARE ACQUIRED FOR THE PURPOSE OF ACQUIRING
THE RIGHT TO INHABIT A HOUSING UNIT OWNED BY THE CORPORATION;
  (V) A CONDOMINIUM UNIT;
  (VI) A RESIDENTIAL DWELLING THAT IS A DUPLEX, TRIPLEX OR A FOURPLEX;
  (VII) A MOBILE HOME THAT COMPLIES WITH THE PRESCRIBED STANDARDS AND IS
SUITABLE FOR YEAR ROUND PERMANENT RESIDENTIAL OCCUPATION;
  (VIII) A PARTIAL OWNERSHIP INTEREST AS A  TENANT  IN  COMMON  OF  REAL
PROPERTY,  IF  THE  OWNERSHIP  INTEREST  WAS ACQUIRED FOR THE PURPOSE OF
ACQUIRING THE RIGHT TO INHABIT A HOUSING UNIT FORMING PART OF  THE  REAL
PROPERTY; OR
  (IX) ANY OTHER RESIDENTIAL PROPERTY AS MAY BE PRESCRIBED.
  (J) "OWNERSHIP OF AN ELIGIBLE HOME" MEANS:
  (I)  IN  THE  CASE  OF AN ELIGIBLE HOME AS PRESCRIBED IN SUBPARAGRAPHS
(I), (II), (III) OR (VI) OF PARAGRAPH (I) OF THIS SUBDIVISION, THE INDI-
VIDUAL HAS AN OWNERSHIP INTEREST IN THE ELIGIBLE HOME AND OWNS  A  FREE-
HOLD  ESTATE  IN THE LAND SUBJACENT TO THE ELIGIBLE HOME OTHER THAN AS A
MORTGAGEE OR IS A LESSEE OF THE LAND SUBJACENT TO THE ELIGIBLE HOME;
  (II) IN THE CASE OF AN ELIGIBLE HOME THAT IS A CONDOMINIUM  UNIT,  THE
INDIVIDUAL  IS AN OWNER OF THE UNIT AND COMMON ELEMENTS WITHIN THE MEAN-
ING OF NEW YORK STATE LAW;
  (III) IN THE CASE OF AN ELIGIBLE HOME IN THE FORM OF A SHARE OR SHARES
OF THE CAPITAL STOCK OF A CO-OPERATIVE CORPORATION  THE  INDIVIDUAL  HAS
ACQUIRED,  JOINTLY WITH ANOTHER PERSON OR OTHERWISE, THE SHARE OR SHARES
TO ENABLE THE INDIVIDUAL TO ACQUIRE A RIGHT TO  OCCUPY  A  HOUSING  UNIT
OWNED  BY THE CO-OPERATIVE CORPORATION, THE INDIVIDUAL AND THE CO-OPERA-
TIVE CORPORATION HAVE ENTERED INTO AN ENFORCEABLE OCCUPANCY AGREEMENT IN

S. 6642                             3

RESPECT OF THE HOUSING UNIT, AND THE INDIVIDUAL IS  ENTITLED  TO  VACANT
POSSESSION  OF  THE HOUSING UNIT UNDER THE TERMS OF THE OCCUPANCY AGREE-
MENT;
  (IV)  IN  THE  CASE OF AN ELIGIBLE HOME THAT IS A MOBILE HOME SUITABLE
FOR YEAR-ROUND PERMANENT RESIDENTIAL OCCUPATION, THE INDIVIDUAL,  EITHER
ALONE  OR JOINTLY WITH ANOTHER PERSON, HAS COMPLETED THE PURCHASE OF THE
MOBILE HOME, THE MOBILE HOME IS SITUATED ON A  FOUNDATION,  WHICH  MEETS
THE  PRESCRIBED  STANDARDS, ON THE LAND WHERE IT IS TO BE INHABITED, AND
THE LAND IS OWNED BY THE INDIVIDUAL,  JOINTLY  WITH  ANOTHER  PERSON  OR
OTHERWISE,  OR  IS  OCCUPIED  BY THE INDIVIDUAL UNDER A LICENSE OR LEASE
THAT PERMITS THE INDIVIDUAL TO LOCATE THE MOBILE HOME ON THE LAND AND TO
OCCUPY IT AS A YEAR-ROUND RESIDENCE;
  (V) IN THE CASE OF AN ELIGIBLE HOME REFERRED TO IN SUBPARAGRAPH  (VII)
OF  PARAGRAPH  (I)  OF  THIS  SUBDIVISION, THE INDIVIDUAL HAS ACQUIRED A
FREEHOLD ESTATE IN THE REAL PROPERTY, OTHER THAN AS A MORTGAGEE, AND  IS
ENTITLED TO VACANT POSSESSION OF SAID HOUSING UNIT;
  (VI)  IN THE CASE OF AN ELIGIBLE HOME OF A PRESCRIBED CLASS OR NATURE,
OR OWNED BY A MEMBER OF A PRESCRIBED CLASS OF  PERSONS,  THE  PRESCRIBED
TERMS AND CONDITIONS ARE MET;
  (VII)  IN  THE CASE OF A GIFT OR INHERITANCE, A PERSON WHO ACQUIRES AN
OWNERSHIP INTEREST IN AN ELIGIBLE HOME BY GIFT FROM  THE  OWNER  OF  THE
INTEREST OR BY REASON OF THE DEATH OF THE OWNER OF THE INTEREST SHALL BE
DEEMED  TO OWN THE ELIGIBLE HOME FOR THE PURPOSES OF THIS SECTION ON THE
EARLIEST DATE ON OR AFTER THE DATE OF THE GIFT OR THE DEATH ON WHICH THE
PERSON RESIDES IN THE ELIGIBLE HOME IS ENTITLED  TO  POSSESSION  OF  THE
ELIGIBLE  HOME  OR ACQUIRES THE OWNERSHIP INTEREST IN THE ELIGIBLE HOME.
THIS DEFINITION DOES NOT INCLUDE AN OWNERSHIP  INTEREST  ACQUIRED  UNDER
THE  TERMS  OF AN AGREEMENT ENFORCEABLE BY OR AGAINST THE PERSON LEGALLY
OR BENEFICIALLY ENTITLED TO THE INTEREST IMMEDIATELY FOLLOWING THE DEATH
OF THE OWNER OF THE INTEREST;
  (VIII) IN THE CASE OF A DEEMED OWNER OF AN ELIGIBLE  HOME,  THE  COMP-
TROLLER  MAY  DEEM  AN  INDIVIDUAL  TO  HAVE OWNED AN ELIGIBLE HOME AT A
PARTICULAR TIME IF OWNERSHIP WAS AT THAT TIME VESTED IN A  PERSON  UNDER
THE  TERMS  OF  AN EXPRESS OR IMPLIED TRUST BY WHICH THE PERSON HELD THE
PROPERTY FOR THE BENEFIT OF THE INDIVIDUAL, EITHER ALONE OR WITH ONE  OR
MORE OTHER PERSONS, AND THE COMPTROLLER IS OF THE OPINION THAT THE INDI-
VIDUAL  EXERCISED  EFFECTIVE  CONTROL,  EITHER ALONE OR WITH ONE OR MORE
OTHER PERSONS, OVER THE ELIGIBLE HOME.
  3. (A) THE COMPTROLLER SHALL IMPLEMENT THE PLAN UNDER  THE  TERMS  AND
CONDITIONS ESTABLISHED BY THIS SECTION AND A MEMORANDUM OF UNDERSTANDING
RELATING TO ANY TERMS OR CONDITIONS NOT OTHERWISE EXPRESSLY PROVIDED FOR
IN THIS SECTION.
  (B)  IN  FURTHERANCE  OF  SUCH IMPLEMENTATION THE MEMORANDUM OF UNDER-
STANDING SHALL ADDRESS THE AUTHORITY AND  RESPONSIBILITY  OF  THE  COMP-
TROLLER AND THE CORPORATION TO:
  (I)  DEVELOP  AND  IMPLEMENT  THE PLAN IN A MANNER CONSISTENT WITH THE
PROVISIONS OF THIS SECTION THROUGH RULES AND REGULATIONS ESTABLISHED  IN
ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
  (II)  ENGAGE  THE  SERVICES  OF  CONSULTANTS  ON  A CONTRACT BASIS FOR
RENDERING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;
  (III) MAKE CHANGES TO THE PLAN REQUIRED FOR THE  PARTICIPANTS  IN  THE
PLAN TO OBTAIN ANY ELIGIBLE FEDERAL OR STATE BENEFITS OR TREATMENT UNDER
ANY LEGISLATION;
  (IV)  CHARGE,  IMPOSE,  AND  COLLECT  ADMINISTRATIVE  FEES AND SERVICE
CHARGES IN CONNECTION WITH ANY AGREEMENT, CONTRACT OR TRANSACTION RELAT-
ING TO THE PLAN;

S. 6642                             4

  (V) DEVELOP MARKETING PLANS AND PROMOTION MATERIAL;
  (VI) ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS BE
DISBURSED;
  (VII)  ESTABLISH  THE  METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY
FOR ADMINISTRATIVE COSTS; AND
  (VIII) DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT THE PURPOSES OF
THIS SECTION.
  4. (A) THE COMPTROLLER SHALL IMPLEMENT  THE  PROGRAM  THROUGH  USE  OF
FINANCIAL  ORGANIZATIONS AS ACCOUNT DEPOSITORIES AND MANAGERS. UNDER THE
PROGRAM, INDIVIDUALS MAY ESTABLISH ACCOUNTS  DIRECTLY  WITH  AN  ACCOUNT
DEPOSITORY.
  (B) THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO  ACT AS DEPOSITORIES AND MANAGERS OF THE PROGRAM. FINANCIAL ORGANIZA-
TIONS SUBMITTING PROPOSALS  SHALL  DESCRIBE  THE  INVESTMENT  INSTRUMENT
WHICH  WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS PROGRAM
DEPOSITORIES AND MANAGERS THE FINANCIAL  ORGANIZATION,  FROM  AMONG  THE
BIDDING  FINANCIAL ORGANIZATIONS THAT DEMONSTRATES THE MOST ADVANTAGEOUS
COMBINATION, BOTH TO POTENTIAL PROGRAM PARTICIPANTS AND THIS  STATE,  OF
THE FOLLOWING FACTORS:
  (I) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
  (II) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
  (III)  THE  ABILITY  OF  THE INVESTMENT INSTRUMENT TO TRACK INCREASING
COSTS OF THE HOUSING MARKET;
  (IV) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY  RECORDKEEP-
ING AND REPORTING REQUIREMENTS;
  (V)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
  (VI) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO PERSONS  FOR  OPENING
ACCOUNTS;
  (VII)  THE  MINIMUM INITIAL DEPOSIT AND MINIMUM CONTRIBUTIONS THAT THE
FINANCIAL ORGANIZATION WILL REQUIRE;
  (VIII) THE ABILITY OF BANKING ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
  (IX) OTHER BENEFITS TO THE STATE OR  ITS  RESIDENTS  INCLUDED  IN  THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM.
  (C)  THE COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR  MORE
TYPES OF INVESTMENT INSTRUMENT.
  (D)  THE  COMPTROLLER  MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION
FOR THE PROGRAM.
  (E) A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
THE FINANCIAL ORGANIZATION TO:
  (I) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
REQUIREMENTS  OF  THIS  SECTION  AND  ANY  ACTIONS  NOT  CONTRARY TO ITS
CONTRACT TO MANAGE THE PROGRAM TO QUALIFY AS A QUALIFIED  "HOMEOWNERSHIP
SAVINGS PLAN" AS DEFINED BY THIS SECTION;
  (II)  KEEP  ADEQUATE RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND  PROVIDE  THE  COMPTROLLER  WITH  THE
INFORMATION  NECESSARY  TO  PREPARE  THE  STATEMENTS  REQUIRED  BY  THIS
SECTION;
  (III) COMPILE AND TOTAL INFORMATION CONTAINED IN  STATEMENTS  REQUIRED
TO  BE  PREPARED UNDER THIS SECTION AND PROVIDE SUCH COMPILATIONS TO THE
COMPTROLLER;

S. 6642                             5

  (IV) IF THERE IS MORE THAN ONE  PROGRAM  MANAGER,  PROVIDE  THE  COMP-
TROLLER  WITH  SUCH  INFORMATION  NECESSARY TO DETERMINE COMPLIANCE WITH
THIS SECTION;
  (V)  PROVIDE  THE  COMPTROLLER OR HIS DESIGNEE ACCESS TO THE BOOKS AND
RECORDS OF THE PROGRAM MANAGER TO THE EXTENT NEEDED TO DETERMINE COMPLI-
ANCE WITH THE CONTRACT;
  (VI) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
  (VII) BE AUDITED AT LEAST ANNUALLY  BY  A  FIRM  OF  CERTIFIED  PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER;
  (VIII)  PROVIDE  THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS
AND REPORTS MADE BY IT DURING THE TERM OF  THE  MANAGEMENT  CONTRACT  OR
WHILE  IT  IS  HOLDING  ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS OR
REPORTS THAT WILL NOT BECOME PART OF THE PROGRAM.  THE  PROGRAM  MANAGER
SHALL  MAKE  AVAILABLE  FOR REVIEW BY THE COMPTROLLER THE RESULTS OF ANY
PERIODIC EXAMINATION OF SUCH MANAGER BY ANY STATE  OR  FEDERAL  BANKING,
INSURANCE,  OR  SECURITIES  COMMISSION,  EXCEPT  TO THE EXTENT THAT SUCH
REPORT OR REPORTS MAY NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES
OF SUCH COMMISSION; AND
  (IX) ENSURE THAT ANY DESCRIPTION OF THE PROGRAM, WHETHER IN WRITING OR
THROUGH THE USE OF ANY MEDIA, IS  CONSISTENT  WITH  THE  MARKETING  PLAN
DEVELOPED IN COMPLIANCE WITH THIS SECTION.
  (F)  THE  COMPTROLLER  MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF
THE OPERATIONS AND FINANCIAL POSITION  OF  THE  PROGRAM  DEPOSITORY  AND
MANAGER  AT  ANY  TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED
ABOUT THE FINANCIAL POSITION, THE RECORDKEEPING PRACTICES, OR THE STATUS
OF ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
  (G) DURING THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE  COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS.    SUCH  EXAMINATION SHALL BE CONDUCTED AT LEAST BIENNIALLY IF
SUCH MANAGER IS NOT OTHERWISE SUBJECT TO  PERIODIC  EXAMINATION  BY  THE
SUPERINTENDENT  OF  FINANCIAL  SERVICES,  THE  FEDERAL DEPOSIT INSURANCE
CORPORATION OR OTHER SIMILAR ENTITY.
  (H) (I) IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM  MANAGER
OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
  (1) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
  (2) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
  (3)  NO  NEW  ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL ORGANIZATION;
AND
  (4) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT  TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
  (II)  IF  THE  COMPTROLLER  TERMINATES  A  FINANCIAL ORGANIZATION AS A
PROGRAM MANAGER OR DEPOSITORY, HE OR SHE SHALL TAKE CUSTODY OF  ACCOUNTS
HELD  BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY TRANSFER
SUCH ACCOUNTS TO ANOTHER FINANCIAL ORGANIZATION THAT IS  SELECTED  AS  A
PROGRAM MANAGER OR DEPOSITORY AND INTO INVESTMENT INSTRUMENTS AS SIMILAR
TO THE ORIGINAL INSTRUMENTS AS POSSIBLE.
  (I)  THE  COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECES-
SARY AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
  5. (A) THE TERMS OF THE PLAN DO NOT PERMIT ANY PAYMENT  TO  THE  PLAN-
HOLDER OF ANY ASSET OF THE PLAN EXCEPT BY WAY OF:
  (I)  A  SINGLE PAYMENT OF ALL OF THE ASSETS OF THE PLAN TO THE COMMIS-
SIONER OF HOUSING TO HOLD THE ASSETS OF THE PLAN AS  TRUST  PROPERTY  IN
TRUST  FOR THE PLANHOLDER AND THE STATE JOINTLY AND TO LEGALLY REPRESENT

S. 6642                             6

THE PLANHOLDER IN THE PURCHASE BY THE PLANHOLDER OF A QUALIFYING  ELIGI-
BLE HOME, OR
  (II)  A  SINGLE PAYMENT OF ALL THE ASSETS OF THE PLAN, LESS THE AMOUNT
TO BE WITHHELD BY THE FINANCIAL ORGANIZATION  OR  THE  AMOUNT,  IF  ANY,
DIRECTED  BY  THE COMPTROLLER TO THE PLANHOLDER OR TO THE LEGAL PERSONAL
REPRESENTATIVE OF THE PLANHOLDER UPON THE DEATH OF THE PLANHOLDER.
  (B) THE TERMS OF THE PLAN REQUIRE THE FINANCIAL ORGANIZATION TO  WITH-
HOLD AND REMIT TO THE COMPTROLLER ANY AMOUNT REQUIRED UNDER THIS SECTION
ON  ANY  PAYMENT OF ASSETS OF THE PLAN TO THE PLANHOLDER OR TO THE LEGAL
PERSONAL REPRESENTATIVE OF THE PLANHOLDER ON THE DEATH OF THE  PLANHOLD-
ER.
  (C) THE TERMS OF THE PLAN PROVIDE THAT THE FINANCIAL ORGANIZATION WILL
ACCEPT  REPAYMENT OF ASSETS INTO THE PLAN FROM A COMMISSIONER OF HOUSING
TO WHOM ASSETS OF THE PLAN WERE PAID.
  (D) THE TERMS OF THE PLAN PROVIDE THAT THE PAYMENT TO  THE  PLANHOLDER
IS  NOT CAPABLE IN WHOLE OR IN PART OF SURRENDER, ASSIGNMENT OR TRANSFER
EXCEPT AS PERMITTED BY AN ELECTION UNDER THIS SECTION.
  (E) THE PLANHOLDER IS AT LEAST EIGHTEEN YEARS OF AGE AND A RESIDENT OF
NEW YORK AT THE TIME OF ENTERING INTO THE PLAN.
  (F) THE PLANHOLDER SHALL BE ELIGIBLE FOR THIS PROGRAM IF  THEY  ARE  A
FIRST TIME HOMEBUYER AS DEFINED UNDER THE FEDERAL SONYMA PROGRAM AND (I)
HAS  NOT  HAD  ANY OWNERSHIP INTEREST IN HIS OR HER PRIMARY RESIDENCE AT
ANY TIME DURING THE THREE YEARS PRIOR TO THE DATE OF MAKING AN  APPLICA-
TION,  AND  (II)  AT  THE  TIME OF MAKING THE APPLICATION DOES NOT OWN A
VACATION OR INVESTMENT HOME. THIS DEFINITION INCLUDES  RESIDENCES  OWNED
IN THE UNITED STATES AND ABROAD.
  (G)  THE  TERMS OF THE PLAN PROHIBIT ANY AMENDMENT TO THE TERMS OF THE
PLAN:
  (I) THAT WOULD RESULT IN THE TERMS OF THE PLAN AS AMENDED  FAILING  TO
COMPLY WITH THIS SECTION;
  (II)  THAT  WOULD PERMIT OR REQUIRE ANY PERSON TO DO ANYTHING CONTRARY
TO THIS SECTION; OR
  (III) THAT WOULD PREVENT OR PROHIBIT ANY PERSON  FROM  DOING  ANYTHING
REQUIRED BY THIS SECTION TO BE DONE.
  (H) THE TERMS OF THE PLAN PROVIDE THAT ON THE DEATH OF THE PLANHOLDER,
THE  FINANCIAL  ORGANIZATION  SHALL TRANSFER OR DISTRIBUTE ALL ASSETS OF
THE PLAN, LESS ANY AMOUNT REQUIRED BY THIS SECTION TO  BE  WITHHELD  AND
REMITTED TO THE COMPTROLLER, IN ACCORDANCE WITH THIS SECTION.
  (I)  THE  TERMS  OF THE PLAN PROHIBIT THE HOLDING OF THE ASSETS OF THE
PLAN IN ANY FORM OTHER THAN QUALIFIED INVESTMENTS.
  (J) THE PLAN INCLUDES A PROVISION DENYING THE  FINANCIAL  ORGANIZATION
ANY  RIGHT  OF  SET-OFF  AS REGARDS THE ASSETS OF THE PLAN IN CONNECTION
WITH ANY DEBT OR OBLIGATION TO THE FINANCIAL ORGANIZATION THAT THE PLAN-
HOLDER UNDER THE PLAN OWES OR MAY THEREAFTER OWE.
  (K) THE TERMS OF THE PLAN INCLUDE THE ACKNOWLEDGMENT BY THE PLANHOLDER
THAT HE OR SHE UNDERSTANDS THAT THE AMOUNT OF  A  TAX  CREDIT,  IF  ANY,
AVAILABLE  WITH  RESPECT  TO  CONTRIBUTIONS MADE TO THE PLAN IN ANY YEAR
DEPEND ON THE PLANHOLDER'S LEVEL OF INCOME FOR THAT YEAR  AND  THAT  THE
PROVISIONS OF THIS SECTION APPLY EVEN IF THE PLANHOLDER MAY NOT BE ENTI-
TLED TO A TAX CREDIT IN ANY YEAR.
  (L) THE TERMS OF THE PLAN CONTAIN THE CONSENT OF THE PLANHOLDER TO THE
RELEASE  TO THE COMPTROLLER OF ALL INFORMATION OBTAINED BY THE FINANCIAL
ORGANIZATION  WITH  RESPECT  TO  THE  PLAN,  THE  PLANHOLDER   AND   THE
PLANHOLDER'S  SPOUSE  OR COMMON-LAW PARTNER, IF ANY, FOR THE PURPOSES OF
THIS SECTION AND THE OPERATION OF THE PLAN.

S. 6642                             7

  6. NO TAX CREDIT SHALL BE  ISSUED  TO  INDIVIDUALS  OR  COUPLES  WHOSE
INCOME EXCEEDS THE MAXIMUM INCOME LIMITS ESTABLISHED BY THE STATE OF NEW
YORK MORTGAGE AGENCY.
  7. (A) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO:
  (I)  GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST WITH
RESPECT TO AN ACCOUNT UNLESS THE DESIGNATED BENEFICIARY IS  THE  ACCOUNT
OWNER;
  (II)  GUARANTEE  THAT A DESIGNATED BENEFICIARY WILL BE QUALIFIED FOR A
HOME LOAN;
  (III) CREATE STATE RESIDENCY FOR  AN  INDIVIDUAL  MERELY  BECAUSE  THE
INDIVIDUAL IS A DESIGNATED BENEFICIARY; OR
  (IV)  GUARANTEE  THAT  AMOUNTS  SAVED  PURSUANT TO THE PROGRAM WILL BE
SUFFICIENT TO COVER THE QUALIFIED HOME OWNERSHIP EXPENSES  OF  A  DESIG-
NATED BENEFICIARY.
  (B) (I) NOTHING IN THIS SECTION SHALL CREATE OR BE CONSTRUED TO CREATE
ANY  OBLIGATION  OF THE COMPTROLLER, THE STATE, OR ANY AGENCY OR INSTRU-
MENTALITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF ANY ACCOUNT OWNER
OR DESIGNATED BENEFICIARY WITH RESPECT TO:
  (1) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
  (2) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT.
  (II) THE COMPTROLLER AND THE CORPORATION BY RULE OR  REGULATION  SHALL
PROVIDE THAT EVERY CONTRACT, APPLICATION, DEPOSIT SLIP, OR OTHER SIMILAR
DOCUMENT  THAT  MAY  BE  USED  IN  CONNECTION  WITH A CONTRIBUTION TO AN
ACCOUNT CLEARLY INDICATE THAT THE ACCOUNT IS NOT INSURED  BY  THE  STATE
AND NEITHER THE PRINCIPAL DEPOSITED NOR THE INVESTMENT RETURN IS GUARAN-
TEED BY THE STATE.
  S  3.  The  real  property  tax law is amended by adding a new section
421-n to read as follows:
  S 421-N. EXEMPTION FOR PROPERTIES PURCHASED IN TARGET AREAS WITH A NEW
YORK STATE HOME OWNERSHIP SAVINGS PLAN. 1. RESIDENTIAL PROPERTIES  WHICH
HAVE BEEN PURCHASED IN TARGET AREAS THROUGH A NEW YORK STATE HOME OWNER-
SHIP  PLAN  PURSUANT  TO SECTION NINETY-SEVEN-J OF THE STATE FINANCE LAW
SHALL BE EXEMPT FROM ALL LOCAL AND MUNICIPAL TAXES.
  2. FOR THE PURPOSES OF THIS SECTION "TARGET AREAS" SHALL HAVE THE SAME
MEANING AS DEFINED BY THE STATE OF NEW YORK MORTGAGE AGENCY.
  3. (A) APPLICATIONS FOR EXEMPTION UNDER THIS SECTION  SHALL  BE  FILED
WITH  THE  ASSESSORS  BETWEEN  FEBRUARY FIRST AND MARCH FIFTEENTH OF THE
CALENDAR YEAR AND THE ASSESSORS SHALL CERTIFY TO THE COLLECTING  OFFICER
THE AMOUNT OF EXEMPTION FROM LOCAL AND MUNICIPAL TAXES.
  (B)  THE  ASSESSOR  AND  LOCAL HOUSING AGENCY MAY PROMULGATE RULES AND
REGULATIONS TO CARRY OUT THE PROVISIONS OF THIS SECTION AND MAY  REQUIRE
PAYMENT OF A REASONABLE FILING FEE.
  S 4. This act shall take effect immediately.

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