S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4888
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 6, 2017
                                ___________
 
 Introduced  by  M.  of  A.  ROSENTHAL  --  read once and referred to the
   Committee on Housing
 
 AN ACT to amend the administrative code of the city  of  New  York,  the
   emergency tenant protection act of nineteen seventy-four and the emer-
   gency  housing rent control law, in relation to applications for major
   capital improvement rent increases

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
 26-405 of the administrative code of the city of New York, as amended by
 section  31  of  part A of chapter 20 of the laws of 2015, is amended to
 read as follows:
   (g) There has been since July first, nineteen hundred seventy, a major
 capital improvement required for the operation, preservation or  mainte-
 nance  of  the  structure. An adjustment under this subparagraph (g) for
 any order of the commissioner issued after the  effective  date  of  the
 rent  act  of 2015 shall be in an amount sufficient to amortize the cost
 of the improvements pursuant to this subparagraph (g) over an eight-year
 period for buildings with thirty-five or fewer  units  or  a  nine  year
 period  for  buildings with more than [thiry-five] THIRTY-FIVE units[,];
 PROVIDED, HOWEVER, NO APPLICATION FOR A MAJOR CAPITAL  IMPROVEMENT  RENT
 INCREASE  SHALL  BE  APPROVED  BY  THE DIVISION OF HOUSING AND COMMUNITY
 RENEWAL UNLESS THE OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS
 PERTAINING TO THE MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH  APPLICATION.
 ANY  APPLICATION  SUBMITTED  WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED
 PERMITS SHALL BE DENIED; or
   § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
 tive code of the city of New York, as amended by section 29 of part A of
 chapter 20 of the laws of 2015, is amended to read as follows:
   (6) provides criteria whereby the commissioner may act  upon  applica-
 tions  by  owners  for  increases  in  excess  of the level of fair rent
 increase established under this law provided, however, that such  crite-
 ria  shall  provide  (a) as to hardship applications, for a finding that
 the level of fair rent increase is not sufficient to enable the owner to
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05141-01-7

 A. 4888                             2
 
 maintain approximately the same average annual net income  (which  shall
 be  computed  without regard to debt service, financing costs or manage-
 ment fees) for the three year period ending on or within six  months  of
 the  date  of  an application pursuant to such criteria as compared with
 annual net income, which prevailed on the average over the period  nine-
 teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
 first three years of operation if the building was completed since nine-
 teen hundred sixty-eight or for the first three  fiscal  years  after  a
 transfer of title to a new owner provided the new owner can establish to
 the  satisfaction  of  the commissioner that he or she acquired title to
 the building as a result of a bona fide sale of the entire building  and
 that  the new owner is unable to obtain requisite records for the fiscal
 years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
 despite  diligent  efforts to obtain same from predecessors in title and
 further provided that the new owner can provide financial data  covering
 a  minimum  of  six  years under his or her continuous and uninterrupted
 operation of the building to meet the three year to three  year  compar-
 ative  test  periods  herein provided; and (b) as to completed building-
 wide major capital improvements, for a finding  that  such  improvements
 are deemed depreciable under the Internal Revenue Code and that the cost
 is  to  be amortized over an eight-year period for a building with thir-
 ty-five or fewer housing accommodations, or a  nine-year  period  for  a
 building  with  more  than  thirty-five  housing accommodations, for any
 determination issued by the division of housing  and  community  renewal
 after  the  effective  date  of  the  rent  act of 2015, based upon cash
 purchase price exclusive of interest or service charges. THE DIVISION OF
 HOUSING AND COMMUNITY RENEWAL SHALL REQUIRE THE SUBMISSION OF COPIES  OF
 ALL PERMITS PERTAINING TO MAJOR CAPITAL IMPROVEMENT WORK WITH ANY APPLI-
 CATION  FOR  A  MAJOR CAPITAL IMPROVEMENT RENT INCREASE. ANY APPLICATION
 SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS  SHALL  BE
 DENIED.  Notwithstanding  anything  to the contrary contained herein, no
 hardship increase granted pursuant to this paragraph shall,  when  added
 to the annual gross rents, as determined by the commissioner, exceed the
 sum of, (i) the annual operating expenses, (ii) an allowance for manage-
 ment  services  as  determined  by the commissioner, (iii) actual annual
 mortgage debt service (interest and amortization) on its indebtedness to
 a lending institution,  an  insurance  company,  a  retirement  fund  or
 welfare  fund  which is operated under the supervision of the banking or
 insurance laws of the state of New York or the United States,  and  (iv)
 eight  and  one-half percent of that portion of the fair market value of
 the property which exceeds the unpaid principal amount of  the  mortgage
 indebtedness  referred  to in subparagraph (iii) of this paragraph. Fair
 market value for the purposes of this paragraph shall be six  times  the
 annual gross rent. The collection of any increase in the stabilized rent
 for  any  apartment  pursuant  to  this  paragraph  shall not exceed six
 percent in any year from the effective date of the  order  granting  the
 increase  over  the  rent set forth in the schedule of gross rents, with
 collectability of any dollar excess above said sum to be spread  forward
 in similar increments and added to the stabilized rent as established or
 set in future years;
   § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
 576  of  the  laws of 1974, constituting the emergency tenant protection
 act of nineteen seventy-four, as amended by section  30  of  part  A  of
 chapter 20 of the laws of 2015, is amended to read as follows:
   (3)  there has been since January first, nineteen hundred seventy-four
 a major capital improvement required for the operation, preservation  or

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 maintenance  of  the structure. An adjustment under this paragraph shall
 be in an amount sufficient to amortize  the  cost  of  the  improvements
 pursuant to this paragraph over an eight-year period for a building with
 thirty-five or fewer housing accommodations, or a nine-year period for a
 building  with  more  than  thirty-five  housing accommodations, for any
 determination issued by the division of housing  and  community  renewal
 after  the effective date of the rent act of 2015[,]; PROVIDED, HOWEVER,
 NO APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT  INCREASE  SHALL  BE
 APPROVED  BY  THE  DIVISION  OF HOUSING AND COMMUNITY RENEWAL UNLESS THE
 OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO  THE
 MAJOR  CAPITAL  IMPROVEMENT  WORK WITH SUCH APPLICATION. ANY APPLICATION
 SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS  SHALL  BE
 DENIED; or
   §  4. Subparagraph 7 of the second undesignated paragraph of paragraph
 (a) of subdivision 4 of section 4 of chapter 274 of the  laws  of  1946,
 constituting  the  emergency  housing  rent  control  law, as amended by
 section 32 of part A of chapter 20 of the laws of 2015,  is  amended  to
 read as follows:
   (7)  there has been since March first, nineteen hundred fifty, a major
 capital improvement required for the operation, preservation or  mainte-
 nance  of  the structure; which for any order of the commissioner issued
 after the effective date of the rent  act  of  2015  the  cost  of  such
 improvement  shall  be amortized over an eight-year period for buildings
 with thirty-five or fewer units or a nine year period for buildings with
 more than  [thiry-five]  THIRTY-FIVE  units[,];  PROVIDED,  HOWEVER,  NO
 APPLICATION  FOR  A  MAJOR  CAPITAL  IMPROVEMENT  RENT INCREASE SHALL BE
 APPROVED BY THE DIVISION OF HOUSING AND  COMMUNITY  RENEWAL  UNLESS  THE
 OWNER  OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE
 MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH  APPLICATION.  ANY  APPLICATION
 SUBMITTED  WITH  FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL BE
 DENIED; or
   § 5. This act shall take effect immediately; provided that:
   (a) the amendments to section 26-405 of the city  rent  and  rehabili-
 tation  law  made  by section one 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;
   (b)  the amendments to section 26-511 of the rent stabilization law of
 nineteen hundred sixty-nine made by section two 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, as  from  time
 to time amended;
   (c) the amendments to section 6 of the emergency tenant protection act
 of  nineteen seventy-four made by section three 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, as from time to time amended; and
   (d)  the amendments to section 4 of the emergency housing rent control
 law made by section 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.