Senate Bill S9154

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  9154--A
 
                             I N  S E N A T E
 
                              August 24, 2018
                                ___________
 
 Introduced  by Sens. GIANARIS, AVELLA -- read twice and ordered printed,
   and when printed to be committed to the Committee on Rules --  commit-
   tee  discharged, bill amended, ordered reprinted as amended and recom-
   mitted to said committee
 
 AN ACT eliminating the department of homes and community renewal's major
   capital improvement  program;  creating  the  guaranteed  habitability
   protections  program  within  the  department  of  homes and community
   renewal; to amend the tax law, in relation to  creating  a  guaranteed
   habitability  protections tax credit; to amend chapter 274 of the laws
   of 1946, constituting the emergency  housing  rent  control  law,  the
   emergency  tenant  protection  act  of  nineteen  seventy-four and the
   administrative code of the city of New York, in relation to  eliminat-
   ing rent increases to pay for major capital improvements
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. (a) The department of homes and community renewal shall end
 the major capital improvement program. All increases  to  rents  allowed
 during  the  life  of  the  major  capital  improvement program shall be
 repealed upon petition from a tenant, all  applications  pending  review
 for  the  major capital improvement program shall be denied, and no rent
 increases shall be allowed under the major capital improvement program.
   (b) The department of homes and community renewal, upon repealing  any
 increase  in  rent  under  the  major capital improvement program, shall
 require that the rent is reduced by an  amount  equal  to  that  of  the
 increase  allowed  under  the  major capital improvement program in that
 instance for all current tenants affected  by  such  increase  provided,
 however,  that  no  rent  shall  be  reduced to an amount lower than the
 amount such rent was ten years or more in the past. This rent  shall  be
 considered the legal rent and shall no longer by a preferential rent.
   (c)  The  department of homes and community renewal shall require that
 any increase in a tenant's security deposit due to an increase  in  rent
 under  the  major capital improvement program be repaid to the tenant by
 the landlord within thirty days of such repeal.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD16373-06-8

 S. 9154--A                          2
 
   (d) The new legal rent shall be the legal rent beginning on  the  date
 rent  is  required  to  be  paid  next succeeding the repeal of any rent
 increase under the major capital improvement program.
   (e) Any lease signed after a repeal of a rent increase under the major
 capital  improvement  program  shall be tied to the new legal rent which
 shall be  without  such  repealed  increases  under  the  major  capital
 improvement program.
   (f)  The  department  of  homes and community renewal shall notify all
 current tenants affected by an increase in rent under the major  capital
 improvement  program  that  they  can  appeal to such department for the
 repeal of such increase in rent and that any increase in rent under  the
 major  capital  improvement  program that is repealed will result in the
 reduction of rent and the repayment  of  the  various  security  deposit
 increases associated with said increases.
   (g)  The  department  of homes and community renewal shall, within one
 year of the effective date of this act, consider  all  appeals  for  the
 repeal  of  an  increase  in  rent  under  the major capital improvement
 program. If an appeal was filed but not ruled  upon  after  an  investi-
 gation  within one year of the effective date of this act by the depart-
 ment of homes and community renewal, the appeal shall be granted.
   § 2. (a) The department of  homes  and  community  renewal  is  hereby
 authorized   and   directed   to  establish  a  guaranteed  habitability
 protections program and promulgate, amend, add or remove  any  rules  or
 regulations necessary to establish such program.
   (b)  The  program  shall work to ensure the habitability of all rental
 dwellings, specifically that no rental dwelling becomes uninhabitable by
 requiring regular updates and improvements to rental dwellings. A rental
 dwelling shall be deemed uninhabitable where it is not safe and  livable
 and the landlord would be in violation of the warranty of habitability.
   (c) When the department of homes and community renewal determines that
 any  unit of a rental dwelling has an issue which may impact the habita-
 bility of the unity, such  department  under  this  program  shall  give
 notice  to  the  landlord.  Where the issue is not life threatening, the
 landlord shall have within thirty  days  to  rectify  the  issue  before
 incurring  a  violation.  Where the issue is life threatening, as deter-
 mined by the department of homes and  community  renewal,  the  landlord
 shall  have  an amount of time as determined by such department based on
 the severity of the issue  to  rectify  the  issue  before  incurring  a
 violation. The department of homes and community renewal shall determine
 which  issues are and which issues are not life threatening. Upon incur-
 ring a violation, the landlord shall have the same  amount  of  time  to
 rectify  the issue before incurring another violation. An issue shall be
 deemed rectified when the issue no longer exists  or  the  tenants  have
 been  moved  into  another  unit of equal or greater quality, where such
 determination of quality shall be made by the department  of  homes  and
 community renewal. A landlord shall be fined:
   (i)  $10,000  for the first violation involving a non-life threatening
 issue;
   (ii) $25,000 for the second violation involving a non-life threatening
 issue;
   (iii) $50,000 for the third and each subsequent violation involving  a
 non-life threatening issue; and
   (iv)  $100,000  for  each resident of an affected unit for a violation
 involving a life threatening issue.
   § 3. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 53 to read as follows:

 S. 9154--A                          3

   53.  GUARANTEED  HABITABILITY PROTECTIONS TAX CREDIT. (A) ALLOWANCE OF
 CREDIT. A  TAXPAYER  WITH  APPROVAL  FROM  THE  GUARANTEED  HABITABILITY
 PROTECTIONS  PROGRAM  OF  THE  DEPARTMENT OF HOMES AND COMMUNITY RENEWAL
 SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN  PARAGRAPH  (B)
 OF THIS SUBDIVISION, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (B)  AMOUNT OF CREDIT. THE CREDIT ALLOWED PURSUANT TO PARAGRAPH (A) OF
 THIS SUBDIVISION SHALL BE IN AN AMOUNT EQUAL TO THE AMOUNT  APPROVED  BY
 THE  GUARANTEED  HABITABILITY  PROTECTIONS  PROGRAM OF THE DEPARTMENT OF
 HOMES AND COMMUNITY RENEWAL.
   (C) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
 FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
 THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
 SECTION  TWO  HUNDRED  TEN  OF  THIS ARTICLE. IF, HOWEVER, THE AMOUNT OF
 CREDITS ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES  THE
 TAX  TO  SUCH  AMOUNT,  ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
 TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
 REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
 EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
 SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
 NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   §  4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
 of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
 follows:
 (XLIV) GUARANTEED HABITABILITY        AMOUNT OF CREDIT UNDER
 PROTECTIONS TAX CREDIT UNDER          SUBDIVISION FIFTY-THREE OF
 SUBSECTION (JJJ)                      SECTION TWO HUNDRED TEN-B
   §  5. Section 606 of the tax law is amended by adding a new subsection
 (jjj) to read as follows:
   (JJJ) GUARANTEED HABITABILITY PROTECTIONS TAX CREDIT. (1) ALLOWANCE OF
 CREDIT. A  TAXPAYER  WITH  APPROVAL  FROM  THE  GUARANTEED  HABITABILITY
 PROTECTIONS  PROGRAM  OF  THE  DEPARTMENT OF HOMES AND COMMUNITY RENEWAL
 SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN  PARAGRAPH  TWO
 OF THIS SUBSECTION, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2)  AMOUNT OF CREDIT. THE CREDIT ALLOWED PURSUANT TO PARAGRAPH ONE OF
 THIS SUBSECTION SHALL BE IN AN AMOUNT EQUAL TO THE  AMOUNT  APPROVED  BY
 THE  GUARANTEED  HABITABILITY  PROTECTIONS  PROGRAM OF THE DEPARTMENT OF
 HOMES AND COMMUNITY RENEWAL.
   (3) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT  ALLOWED  UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
 SUCH  YEAR,  THE  EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
 CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS  OF  SECTION  SIX
 HUNDRED  EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST
 SHALL BE PAID THEREON.
   § 6. Paragraph 2 of subdivision 3-a of section 4,  subparagraph  (iii)
 of the opening paragraph of paragraph (a) of subdivision 4 of section 4,
 subparagraphs  7,  8,  9  and 10 of the second undesignated paragraph of
 paragraph (a) of subdivision 4  of  section  4,  and  subdivision  9  of
 section 5 of chapter 274 of the laws of 1946, constituting the emergency
 housing rent control law, as amended by chapter 337 of the laws of 1961,
 subparagraph  (iii)  of  paragraph  (a) of subdivision 4 of section 4 as
 amended by chapter 21 of the laws of 1962, subparagraphs 8, 9 and 10  of
 the  second  undesignated paragraph of paragraph (a) of subdivision 4 of
 section 4 as amended by section 25 of part B of chapter 97 of  the  laws
 of  2011,  subparagraph  7 of the second undesignated paragraph of para-
 graph (a) of subdivision 4 of section 4 as amended by section 32 of part
 A of chapter 20 of the laws of 2015, and subdivision 9 of section  5  as

 S. 9154--A                          4

 added  by  chapter  116  of  the  laws  of  1997, are amended to read as
 follows:
   (2)  the  amount  of  increases  in  maximum  rent authorized by order
 because of increases in dwelling space, services, furniture, furnishings
 or equipment[, or major capital improvements].
   (iii) The ratio of the sales price to the annual gross income  of  the
 property,  with  consideration given to the total amount of rent adjust-
 ments previously granted,  exclusive  of  rent  adjustments  because  of
 changes  in  dwelling  space, services, furniture, furnishings or equip-
 ment, [major capital improvements,] or substantial rehabilitation;
   (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 thirty-five units, or (8)] there has been since  March  first,
 nineteen  hundred fifty, in structures containing more than four housing
 accommodations, other improvements made with the express consent of  the
 tenants  in occupancy of at least seventy-five per centum of the housing
 accommodations, provided, however, that no adjustment granted  hereunder
 shall  exceed  fifteen  per  centum  unless the tenants have agreed to a
 higher percentage of increase, as herein provided; or  [(9)]  (8)  there
 has  been, since March first, nineteen hundred fifty, a subletting with-
 out written consent from the landlord or an increase in  the  number  of
 adult  occupants  who  are  not  members  of the immediate family of the
 tenant, and the landlord has not been compensated therefor by adjustment
 of the maximum rent by lease or order of the commission or  pursuant  to
 the  federal  act;  or  [(10)]  (9)  the  presence of unique or peculiar
 circumstances materially affecting the maximum rent has  resulted  in  a
 maximum  rent  which  is  substantially  lower  than the rents generally
 prevailing in the same area for substantially similar  housing  accommo-
 dations.
   9.  Notwithstanding  any  provision of this law to the contrary in the
 case where all tenants occupying the housing accommodation on the effec-
 tive date of this subdivision have vacated the housing accommodation and
 a family member of such vacating tenant or tenants is  entitled  to  and
 continues to occupy the housing accommodation subject to the protections
 of  this  law, if such accommodation continues to be subject to this law
 after such family member vacates, on the occurrence of such vacancy  the
 maximum collectable rent shall be increased by a sum equal to the allow-
 ance  then  in  effect  for  vacancy  leases  for housing accommodations
 covered by the rent stabilization law of  nineteen  hundred  sixty-nine,
 including  the  amount  allowed  by paragraph five-a of subdivision c of
 section 26-511 of such law. This increase shall be in  addition  to  any
 other  increases provided in this law including an adjustment based upon
 [a major capital improvement, or] a substantial increase or decrease  in
 dwelling  space  or  a change in the services, furniture, furnishings or
 equipment provided in the housing  accommodation,  pursuant  to  section
 four  of  this law and shall be applicable in like manner to each second
 subsequent succession.
   § 7. Paragraphs 3, 4, and 5 of subdivision  d  and  subdivision  g  of
 section  6 of section 4 of chapter 576 of the laws of 1974, constituting
 the emergency tenant protection act of nineteen seventy-four,  paragraph
 3  of  subdivision d as amended by section 30 of part A of chapter 20 of
 the laws of 2015, paragraph 4 of subdivision d as amended by chapter 403

 S. 9154--A                          5
 
 of the laws of 1983, paragraph 5 of subdivision d as amended by  chapter
 102  of  the  laws of 1984, and subdivision g as added by chapter 116 of
 the laws of 1997, are 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
 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, or
   (4)] an owner by application to the  state  division  of  housing  and
 community  renewal  for  increases  in  the  rents in excess of the rent
 adjustment authorized by the rent guidelines board under this act estab-
 lishes a hardship, and the state division finds that the  rate  of  rent
 adjustment  is  not  sufficient to enable the owner to maintain approxi-
 mately the same ratio between operating expenses,  including  taxes  and
 labor  costs but excluding debt service, financing costs, and management
 fees, and gross rents which prevailed on the average over the  immediate
 preceding  five  year  period, or for the entire life of the building if
 less than five years, or
   [(5)] (4) as an alternative to the hardship application provided under
 paragraph four of this subdivision, owners of buildings acquired by  the
 same  owner or a related entity owned by the same principals three years
 prior to the date of application may apply to the division for increases
 in excess of the level of  applicable  guideline  increases  established
 under  this  law based on a finding by the commissioner that such guide-
 line increases are not sufficient to enable the  owner  to  maintain  an
 annual  gross  rent  income  for  such building which exceeds the annual
 operating expenses of such building by a sum  equal  to  at  least  five
 percent  of such gross rent. For the purposes of this paragraph, operat-
 ing expenses shall consist of the actual,  reasonable,  costs  of  fuel,
 labor, utilities, taxes, other than income or corporate franchise taxes,
 fees,  permits,  necessary  contracted services and non-capital repairs,
 insurance, parts and supplies, management fees and other  administrative
 costs  and  mortgage interest. For the purposes of this paragraph, mort-
 gage interest shall be deemed to mean interest on a bona  fide  mortgage
 including  an allocable portion of charges related thereto.  Criteria to
 be considered in determining a bona fide mortgage other than an institu-
 tional mortgage shall include; condition of the  property,  location  of
 the  property,  the existing mortgage market at the time the mortgage is
 placed, the term of the mortgage, the amortization rate,  the  principal
 amount  of  the mortgage, security and other terms and conditions of the
 mortgage. The commissioner shall set a rental value for any  unit  occu-
 pied  by the owner or a person related to the owner or unoccupied at the
 owner's choice for more than one month at the last regulated  rent  plus
 the minimum number of guidelines increases or, if no such regulated rent
 existed  or  is  known,  the commissioner shall impute a rent consistent
 with other rents in the building. The amount of hardship increase  shall
 be  such  as may be required to maintain the annual gross rent income as
 provided by this paragraph. The division  shall  not  grant  a  hardship
 application  under  this paragraph or paragraph four of this subdivision
 for a period of three years subsequent to granting a  hardship  applica-
 tion  under  the  provisions  of  this  paragraph. The collection of any
 increase in the rent for any  housing  accommodation  pursuant  to  this

 S. 9154--A                          6
 
 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
 rent as established or set in future  years.  No  application  shall  be
 approved unless the owner's equity in such building exceeds five percent
 of: (i) the arms length purchase price of the property; (ii) the cost of
 any  capital  improvements  for  which  the  owner  has  not collected a
 surcharge; (iii) any repayment of principal of any mortgage or loan used
 to finance the purchase of the property or any capital improvements  for
 which  the owner has not collected a surcharge; and (iv) any increase in
 the equalized assessed value of the property which  occurred  subsequent
 to  the first valuation of the property after purchase by the owner. For
 the purposes of this paragraph, owner's equity shall mean the sum of (i)
 the purchase price of the property less the principal of any mortgage or
 loan used to finance the purchase of the property, (ii) the cost of  any
 capital  improvement  for  which the owner has not collected a surcharge
 less the principal of any mortgage or loan used to finance said improve-
 ment, (iii) any repayment of the principal of any mortgage or loan  used
 to  finance  the purchase of the property or any capital improvement for
 which the owner has not collected a surcharge, and (iv) any increase  in
 the  equalized  assessed value of the property which occurred subsequent
 to the first valuation of the property after purchase by the owner.
   g. Notwithstanding any provision of this act to the  contrary  in  the
 case where all tenants named in a lease have permanently vacated a hous-
 ing accommodation and a family member of such tenant or tenants is enti-
 tled  to  and  executes a renewal lease for the housing accommodation if
 such accommodation continues to be subject to this act after such family
 member vacates, on the occurrence of such vacancy  the  legal  regulated
 rent  shall  be increased by a sum equal to the allowance then in effect
 for vacancy leases, including the amount allowed by subdivision (a-1) of
 section ten of this act. Such increase shall be in addition to any other
 increases provided for in this act including an adjustment based upon [a
 major capital improvement, or] a substantial modification or increase of
 dwelling space or services, or installation of new equipment or improve-
 ments or new furniture or furnishings provided  in  or  to  the  housing
 accommodation, pursuant to section six of this act and shall be applica-
 ble in like manner to each second subsequent succession.
   §  8.  Subdivision  (a-1) of section 10 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 16-b of part A of chapter
 20 of the laws of 2015, is amended to read as follows:
   (a-1) provides that, notwithstanding any provision of  this  act,  the
 legal regulated rent for any vacancy lease entered into after the effec-
 tive  date  of  this subdivision shall be as hereinafter set forth.  The
 previous legal regulated rent for such housing  accommodation  shall  be
 increased  by  the  following: (i) if the vacancy lease is for a term of
 two years, twenty percent of the previous legal regulated rent; or  (ii)
 if  the  vacancy  lease  is for a term of one year the increase shall be
 twenty percent of the previous legal regulated rent less an amount equal
 to the difference between (a)  the  two  year  renewal  lease  guideline
 promulgated  by  the guidelines board of the county in which the housing
 accommodation is located applied to the previous  legal  regulated  rent
 and  (b)  the one year renewal lease guideline promulgated by the guide-
 lines board of the county in which the housing accommodation is  located
 applied  to the previous legal regulated rent. However, where the amount

 S. 9154--A                          7
 
 charged and paid by the prior tenant pursuant to paragraph  fourteen  of
 this  subdivision, was less than the legal regulated rent, such increase
 to the legal regulated rent shall not  exceed:    five  percent  of  the
 previous  legal  regulated rent if the last vacancy lease commenced less
 than two years ago; ten percent of the previous legal regulated rent  if
 the last vacancy commenced less than three years ago; fifteen percent of
 the  previous  legal  regulated rent if the last vacancy lease commenced
 less than four years ago; twenty percent of the previous legal regulated
 rent if the last vacancy lease commenced four  or  more  years  ago.  In
 addition,  if the legal regulated rent was not increased with respect to
 such housing accommodation by a permanent vacancy allowance within eight
 years prior to a vacancy lease executed on or after the  effective  date
 of  this  subdivision, the legal regulated rent may be further increased
 by an amount equal to the product resulting from multiplying such previ-
 ous legal regulated rent by six-tenths of one percent and further multi-
 plying the amount of rent increase resulting therefrom by the greater of
 (A) the number of years since  the  imposition  of  the  last  permanent
 vacancy  allowance,  or (B) if the rent was not increased by a permanent
 vacancy allowance since the housing accommodation became subject to this
 act, the number of  years  that  such  housing  accommodation  has  been
 subject  to this act. Provided that if the previous legal regulated rent
 was less than three hundred dollars  the  total  increase  shall  be  as
 calculated  above plus one hundred dollars per month. Provided, further,
 that if the previous legal regulated rent was  at  least  three  hundred
 dollars  and  no  more  than  five hundred dollars in no event shall the
 total increase pursuant to this subdivision be  less  than  one  hundred
 dollars  per  month.  Such  increase  shall  be in lieu of any allowance
 authorized for the one or two year renewal component thereof, but  shall
 be  in  addition  to any other increases authorized pursuant to this act
 including an adjustment based upon [a major capital improvement,  or]  a
 substantial  modification  or increase of dwelling space or services, or
 installation of new  equipment  or  improvements  or  new  furniture  or
 furnishings  provided  in  or  to  the housing accommodation pursuant to
 section six of this act.  The increase authorized  in  this  subdivision
 may not be implemented more than one time in any calendar year, notwith-
 standing the number of vacancy leases entered into in such year.
   §  9.  Section  26-403.2 of the administrative code of the city of New
 York, as added by chapter 116 of the laws of 1997, is amended to read as
 follows:
   § 26-403.2 Increase in maximum collectable rent.  Notwithstanding  any
 provision  of  this  law  to  the contrary in the case where all tenants
 occupying the housing  accommodation  on  the  effective  date  of  this
 section  have  vacated  the housing accommodation and a family member of
 such vacating tenant or tenants is entitled to and continues  to  occupy
 the  housing  accommodation  subject  to the protections of this law, if
 such accommodation continues to be subject to this law after such family
 member vacates, on the occurrence of such vacancy the maximum  collecta-
 ble  rent  shall  be  increased  by a sum equal to the allowance then in
 effect for vacancy leases for housing accommodations covered by the rent
 stabilization law of nineteen hundred sixty-nine, including  the  amount
 allowed  by  paragraph five-a of subdivision c of section 26-511 of such
 law. This increase shall be in addition to any other increases  provided
 for  in  this  law  including  an adjustment based upon [a major capital
 improvement, or] a substantial increase or decrease in dwelling space or
 a change in the services, furniture, furnishings or  equipment  provided

 S. 9154--A                          8
 
 in the housing accommodation, pursuant to section 26-405 of this law and
 shall be applicable in like manner to each second subsequent succession.
   §  10.  Subparagraph  (c)  of  paragraph 1 of subdivision g of section
 26-405 of the administrative code of the city of New York is amended  to
 read as follows:
   (c)  the  ratio  of  the sales price to the annual gross income of the
 property, with consideration given to the total amount of  rent  adjust-
 ments  previously  granted,  exclusive  of  rent  adjustments because of
 changes in dwelling space, services, furniture,  furnishings  or  equip-
 ment, [major capital improvements,] or substantial rehabilitation;
   §  11. Subparagraphs (g), (h), (i), (j), (k), (l), (m), (n) and (o) of
 paragraph 1 of subdivision g of section  26-405  of  the  administrative
 code  of the city of New York, subparagraph (g) as amended by section 31
 of part A of chapter 20 of the laws of 2015, subparagraph (k) as amended
 by chapter 749 of the laws of 1990, and clause 7 of subparagraph (n)  as
 amended  by  local  law  number  76 of the city of New York for the year
 2005, are 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
 maintenance 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 thirty-five units, or
   (h)]  There  have been since March first, nineteen hundred fifty-nine,
 in structures containing more than four  housing  accommodations,  other
 improvements  made  with the express consent of the tenants in occupancy
 of at least seventy-five  per  centum  of  the  housing  accommodations;
 provided,  however,  that  whenever  the city rent agency has determined
 that the improvements proposed were part of a plan designed for  overall
 improvement  of the structure or increases in services, it may authorize
 increases in maximum rents for all housing accommodations affected  upon
 the  express  consent  of the tenants in occupancy of at least fifty-one
 per centum of the housing accommodations, and provided further  that  no
 adjustment  granted hereunder shall exceed fifteen per centum unless the
 tenants have agreed to  a  higher  percentage  of  increase,  as  herein
 provided; or
   [(i)]  (H)  There has been, since March first, nineteen hundred fifty-
 nine, a subletting without written  consent  from  the  landlord  or  an
 increase  in  the  number  of adult occupants who are not members of the
 immediate family of the tenant, and the landlord has  not  been  compen-
 sated  therefor  by  adjustment of the maximum rent by lease or order of
 the city rent agency or pursuant to the state rent act  or  the  federal
 act; or
   [(j)]  (I) The presence of unique or peculiar circumstances materially
 affecting the maximum rent has resulted  in  a  maximum  rent  which  is
 substantially lower than the rents generally prevailing in the same area
 for substantially similar housing accommodations.
   [(k)  The landlord has incurred, since January first, nineteen hundred
 seventy, in connection with and in addition to a concurrent major  capi-
 tal  improvement  pursuant  to subparagraph (g) of this paragraph, other
 expenditures to improve, restore or preserve the quality of  the  struc-
 ture.  An  adjustment  under  this subparagraph shall be granted only if
 such improvements represent an expenditure equal to  at  least  ten  per
 centum of the total operating and maintenance expenses for the preceding

 S. 9154--A                          9

 year.  An adjustment under this subparagraph shall be in addition to any
 adjustment granted for the  concurrent  major  capital  improvement  and
 shall  be  in  an amount sufficient to amortize the cost of the improve-
 ments pursuant to this subparagraph over a seven-year period.
   (l)]  (J)  (1)  The  actual labor expenses currently incurred or to be
 incurred (pursuant to a collective agreement or other obligation actual-
 ly entered into by  the  landlord)  exceed  the  provision  for  payroll
 expenses  in  the  current  applicable operating and maintenance expense
 allowance under subdivision a of this section. No  application  pursuant
 to this subparagraph may be granted within one year from the granting of
 an  adjustment  in  maximum rent pursuant to this subparagraph [(l)], or
 pursuant to subparagraph (a) of this paragraph. Any  rent  increase  the
 applicant  would  be  entitled  to,  or  such portion thereof, shall not
 exceed a total increase of seven and one-half per centum  per  annum  of
 the  maximum rent as provided in paragraph five of subdivision a of this
 section.
   (2) Any adjustment in the  maximum  rents  pursuant  hereto  shall  be
 subject to:
   (i) The adjustment in maximum rent for any twelve-month period for any
 housing  accommodation shall not exceed four percent of the maximum rent
 in effect on December thirty-first, nineteen hundred seventy-three.
   (ii) Where the increase in  labor  costs  compensable  herein  is  the
 result of an industry-wide collective bargaining agreement or a specific
 agreement in anticipation of, or subsequent to, an industry-wide collec-
 tive  bargaining  agreement,  the  adjustment  shall  be  in such amount
 (subject to the above limitation) that the increased rental income  from
 January  first,  nineteen hundred seventy-four to December thirty-first,
 nineteen hundred seventy-six shall reflect the increased labor costs for
 the period from April thirtieth, nineteen hundred seventy-three to April
 thirtieth, nineteen hundred seventy-six.
   (3) For the purpose of this subparagraph [(l)] the increase  in  labor
 costs  shall  be  the  amount  by  which the labor costs (a) actually in
 effect and paid, or (b) actually in effect and paid or payable and fixed
 and determined pursuant to agreement on the date of the  filing  of  the
 application  and projected over the period ending April thirtieth, nine-
 teen hundred seventy-six, exceed the labor costs for the twelve calendar
 months immediately preceding the last day of the month in which the wage
 agreement became effective.
   (4) Notwithstanding any other provision of this chapter,  the  adjust-
 ment  pursuant  to this subparagraph shall be collectible upon the land-
 lord's filing of a report with the city  rent  agency,  subject  to  the
 provisions of subparagraph (e) of paragraph two of subdivision a of this
 section.
   (5)  No increase in the maximum rent for any housing accommodation may
 be granted under this subparagraph [(l)] if on the date when the  appli-
 cation  is sought to be filed, less than the full term of such agreement
 has elapsed since the date of the filing of the last  prior  application
 for  an  increase  with respect to such property under this subparagraph
 [(l)], which application resulted in the granting of an increase. Where,
 however, the landlord establishes the existence of  unique  or  peculiar
 circumstances affecting an increase in labor costs for the property, the
 agency may accept such application where it determines that such accept-
 ance is not inconsistent with the purposes of this local law.
   (6)  The  increase  authorized  herein  shall be apportioned equitably
 among all the housing accommodations in  the  property  whether  or  not
 subject to control under this chapter.

 S. 9154--A                         10
 
   [(m)]  (K)  Where the rehabilitation or improvement of sub-standard or
 deteriorated housing accommodations has been financed  under  a  govern-
 mental program providing assistance through loans, loan insurance or tax
 abatement  or  has  been undertaken under another rehabilitation program
 not so financed but approved by the commissioner.
   [(n)](L)(1) The city rent agency shall hereafter promulgate in January
 of each year;
   (i)  findings  regarding the price increase or decrease, respectively,
 for all types of heating fuel, including numbers two, four and six  home
 heating oils, utility supplied steam, gas, electricity and coal, togeth-
 er  with the sales and excise taxes thereon, on December thirty-first as
 compared to the January first in any year; and
   (ii) standards for consumption of heating fuel, which shall be no more
 than two hundred twenty-five gallons per year per room commencing  Janu-
 ary first, nineteen hundred eighty-one, for buildings using heating oils
 for  heat with comparable unit limitations to be established by the city
 rent agency for utility supplied steam, gas, electricity, coal  and  any
 other types of heating systems, provided that such consumption standards
 for heating fuels shall be reduced by five gallons per room per year for
 heating  oils  and  a  comparable amount for other heating fuels for the
 next succeeding year and ten gallons per room per year for heating  oils
 and a comparable amount for other heating fuels for two succeeding years
 thereafter.
   Such findings and consumption standards shall be published in the City
 Record.
   (2) To obtain a rental adjustment pursuant to this subparagraph [(n)],
 the  landlord shall file a report with the agency on forms prescribed by
 the agency and shall:
   (i) certify the amount of heating fuel consumed in the  calendar  year
 immediately prior to the filing of the report;
   (ii) state the type of fuel used and the number of rooms in the build-
 ing;
   (iii)  certify that (a) all essential services required to be provided
 have been and will continue to be maintained and (b) there has  been  no
 rent  reduction order issued pursuant to this chapter based on the land-
 lord's failure to provide heat or hot  water  during  the  prior  twelve
 months;
   (iv)  certify  on  information  and belief, in order to qualify for an
 additional rent increase pursuant to this subparagraph [(n)],  that  for
 an  individual  housing  accommodation,  if the maximum rent collectible
 pursuant to paragraph five of subdivision a of this section plus  actual
 rent adjustments pursuant to this subparagraph [(n)] and such additional
 rent  increase,  is  equal  to  or  exceeds the maximum rent established
 pursuant to paragraphs three and four of subdivision a of  this  section
 plus  the  amount  calculated  pursuant to subitem (i) of item three and
 subitem (i) of item four of this subparagraph [(n)], each  to  be  allo-
 cated  to  such  housing  accommodation pursuant to subitem (ii) of item
 four of this subparagraph [(n)], that the landlord will not  be  earning
 an  amount  in  excess of the statutory return specified in subparagraph
 (a) of paragraph one of subdivision g of this section  after  collection
 of  a rent increase pursuant to this subparagraph [(n)], with respect to
 a building or buildings serviced by a single heating plant;
   (v) report any funds received with respect  to  the  housing  accommo-
 dations  from  any governmental grant program compensating such landlord
 for fuel price increases during the period for which  an  adjustment  is
 obtained pursuant to this subparagraph [(n)];

 S. 9154--A                         11

   (vi) provide such other information as the agency may require.
   (3)  Rent adjustments for controlled housing accommodations for annual
 heating fuel cost increases  or  decreases  experienced  after  December
 thirty-first,  nineteen  hundred  seventy-nine,  shall  be determined as
 follows:
   (i) the increase or decrease in heating fuel prices found by the agen-
 cy for that year shall be multiplied by the actual consumption,  not  to
 exceed  that year's consumption standard established pursuant to subitem
 (ii) of item one of this subparagraph; and
   (ii) seventy-five percentum of such amount shall  be  allocated  among
 all rental space in the building, including commercial, professional and
 similar  facilities,  provided,  for  the  purposes of this subparagraph
 [(n)], that living rooms, kitchens over fifty-nine square feet  in  area
 and  bedrooms  shall  be considered rooms and that bathrooms, foyers and
 kitchenettes shall not be considered rooms.
   (4) Rent adjustments for controlled housing accommodations for heating
 fuel cost increases or decreases experienced from April ninth,  nineteen
 hundred seventy-nine, through and including December thirty-first, nine-
 teen hundred seventy-nine, shall be determined as follows:
   (i) the increase or decrease in heating fuel prices found by the agen-
 cy  for that period shall be multiplied by seventy-five percentum of the
 actual heating fuel consumption during the period  from  January  first,
 nineteen  hundred  seventy-nine,  through and including December thirty-
 first, nineteen hundred seventy-nine, which consumption shall not exceed
 seventy-five percentum of that year's consumption  standard  established
 by the agency; and
   (ii)  such  amount  shall  be  allocated among all rental space in the
 building, including commercial,  professional  and  similar  facilities,
 provided,  for  the  purposes  of  this  subparagraph [(n)], that living
 rooms, kitchens over fifty-nine square feet in area and  bedrooms  shall
 be  considered  rooms  and that bathrooms, foyers and kitchenettes shall
 not be considered rooms.
   The city rent agency shall promulgate findings for heating fuel  price
 increases or decreases and standards for consumption for the periods set
 forth in this item four thirty days after this local law is enacted. The
 standard for consumption shall be no more than seventy-five percentum of
 two hundred thirty gallons per room for buildings using heating oils for
 heat with comparable unit limitations to be established by the city rent
 agency  for utility supplied steam, gas, electricity, coal and any other
 types of heating systems.
   (5) A landlord who files a report pursuant to  this  subparagraph  and
 who  falsely certifies shall not be eligible to collect any rent adjust-
 ment pursuant to this subparagraph for two years  following  a  determi-
 nation  of  a  false  certification  and,  in  addition, any adjustments
 obtained pursuant to this subparagraph for up to two years prior to such
 determination shall not be collectible for that same  two  year  period.
 Such  landlord shall also be subject to any additional penalties imposed
 by law.
   (6) A landlord annually may file a report pursuant  to  this  subpara-
 graph  [(n)]  after  promulgation  by  the  agency  of  the findings and
 consumption standards set forth in item one of THIS subparagraph  [(n)].
 A rent adjustment pursuant to such report shall be prospectively collec-
 tible  upon  the  landlord's  serving  and  filing the report, provided,
 however, that if a landlord files such report within sixty days  of  the
 promulgation  of  such  findings  and  consumption  standards, such rent

 S. 9154--A                         12
 
 adjustment shall be retroactive to and shall  be  effective  as  of  the
 January first of the year in which the report is filed.
   (7)  A  landlord demanding or collecting a rent adjustment pursuant to
 this subparagraph [(n)] shall at  the  time  of  either  the  demand  or
 collection  issue to the tenant either a rent bill or receipt separately
 setting forth the amount of the adjustment pursuant to this subparagraph
 [(n)]  and  the  amount  of  the  maximum  rent  otherwise  demanded  or
 collected.    If  the tenant has been issued a valid senior citizen rent
 exemption order or a valid disability rent exemption  order,  the  owner
 shall  also separately state the amount payable by the senior citizen or
 person with a disability after the exemption.
   (8) In the event that a rent reduction order is  issued  by  the  city
 rent  agency  based  upon  the landlord's failure to provide heat or hot
 water to housing accommodations for which the landlord is  collecting  a
 rent adjustment pursuant to this subparagraph [(n)], the rent adjustment
 shall  not  be collected during the time such rent reduction order is in
 effect and for twelve months following the date of  the  restoration  of
 the  rent  reduction. In addition, the landlord shall not be eligible to
 collect any subsequent rent adjustment  pursuant  to  this  subparagraph
 [(n)]  until  twelve months following the date of the restoration of the
 rent reduction.
   (9) In the event that the city rent agency promulgates a finding of  a
 price  decrease,  if  any  landlord  who  has obtained a rent adjustment
 pursuant to this subparagraph [(n)] does not file a report  for  a  rent
 adjustment  pursuant to this subparagraph [(n)] within sixty days of the
 promulgation of such findings, then all rent adjustments obtained pursu-
 ant to this subparagraph [(n)] shall not be collectible for a period  of
 twelve months.
   (10)  Any rent adjustment obtained pursuant to this subparagraph [(n)]
 shall not be included in the maximum rent established pursuant to  para-
 graph four or five of subdivision (a) of this section.
   (11)  The  city  rent  agency  shall have the power to promulgate such
 regulations as it may consider necessary or convenient to implement  and
 administer  the  provisions  of this subparagraph [(n)]. The regulations
 shall also require that any rent adjustment  granted  pursuant  to  this
 subparagraph  [(n)]  be  reduced  by an amount equal to any governmental
 grant received by the landlord compensating the landlord  for  any  fuel
 price  increases, but not required by the city, the agency or any grant-
 ing government entity  to  be  expended  for  fuel  related  repairs  or
 improvements.
   [(o)]  (M)  (1) There has been an increase in heating and heating fuel
 expenditures in a property resulting from a city-wide  rise  in  heating
 fuel  costs such that the verifiable expenditures for heating or heating
 fuel in a property for nineteen hundred seventy-four exceeds the verifi-
 able expenditures for such  heating  or  heating  fuel  during  nineteen
 hundred seventy-three.
   (2) To obtain a rental adjustment pursuant to this subparagraph [(o)],
 the  landlord  must  certify that he or she is presently maintaining all
 essential services required to be furnished with respect to the  housing
 accommodations  covered  by  such certification, and that he or she will
 continue to so maintain such essential services for the  period  of  any
 such adjustment.
   (3) To obtain a rental adjustment pursuant to this subparagraph [(o)],
 the  landlord must certify on information and belief that he or she will
 not be earning an amount in excess of the statutory return specified  in
 subparagraph  (a)  of  THIS  paragraph  [one  of  subdivision  g of this

 S. 9154--A                         13

 section] after collection of such rental adjustment, with respect to the
 building or buildings serviced by a single heating plant; and where  the
 building,  or  buildings  serviced  by  a single heating plant, contains
 forty-nine  or  fewer  housing accommodations, the landlord must certify
 that the amount expended directly for heating or heating fuel  in  nine-
 teen hundred seventy-four equalled or exceeded ten per cent of the total
 rental  income  which  was  derived  from  the  property during nineteen
 hundred seventy-four; and, where the building, or buildings serviced  by
 a  single  heating  plant, contains fifty or more housing accommodations
 the landlord must certify that the amount expended directly for  heating
 or  heating  fuel  in nineteen hundred seventy-four equalled or exceeded
 seven and one-half percentum  of  the  total  rental  income  which  was
 derived from the property during nineteen hundred seventy-four.
   (4)  The  total  rental  adjustments for a property to be allocated or
 deemed allocated pursuant to this subparagraph [(o)]  shall  not  exceed
 one-half  of the gross amount by which the total verifiable expenditures
 for heating or heating fuel for nineteen  hundred  seventy-four  exceeds
 the  total  verifiable expenditures for such heating or heating fuel for
 nineteen hundred seventy-three.
   (5) Such total rental adjustments shall be allocated or  deemed  allo-
 cated  pursuant to this subparagraph [(o)] to all housing accommodations
 subject to this chapter, to all other housing accommodations, and to all
 commercial, professional and similar facilities in  or  associated  with
 the  property  in  a  manner to be determined by the agency. In no event
 shall any adjustment in maximum rent pursuant to this subparagraph [(o)]
 for any housing accommodations subject to this chapter exceed a  monthly
 increase of two dollars per room, as defined by item eight below. In any
 apartment  containing  five or more rooms, any increase shall not exceed
 the total of nine dollars.
   (6) Any adjustment pursuant to this subparagraph [(o)] shall be effec-
 tive for all or part of the period July first, nineteen  hundred  seven-
 ty-five  through  June  thirtieth,  nineteen  hundred  seventy-six.  Any
 adjustment pursuant to this subparagraph shall automatically  expire  no
 later than June thirtieth, nineteen hundred seventy-six.
   (7)  The  rental  increases provided for herein shall be effective and
 collectible upon the landlord's filing a report with the agency on forms
 prescribed by the agency and upon giving such notice to the  tenants  as
 the  agency  shall  prescribe,  subject to adjustments upon order of the
 agency.
   (8) In determining the  amount  of  an  adjustment  allocation  of  an
 adjustment  pursuant  to  this  subparagraph  [(o)],  only living rooms,
 kitchens over fifty-nine square feet in area, dining rooms and  bedrooms
 shall be considered rooms; bathrooms, foyers, and kitchenettes shall not
 be considered rooms.
   §  12.  Subdivision  a of section 26-407 of the administrative code of
 the city of New York is amended to read as follows:
   a. Notwithstanding any provisions of  this  chapter,  any  labor  cost
 pass-along  rent  increase requested of, or received from, any tenant on
 or after July first,  nineteen  hundred  seventy-two,  pursuant  to  the
 provisions  of  subparagraph [(1)] (I) of paragraph one of subdivision g
 of section 26-405 of this title,  shall  not  exceed  the  maximum  rent
 adjustment  as  provided  under this chapter after the effective date of
 this section.
   § 13. Paragraphs 5-a and 6 of subdivision c of section 26-511  of  the
 administrative code of the city of New York, paragraph 5-a as amended by
 section 16-a of part A of chapter 20 of the laws of 2015 and paragraph 6

 S. 9154--A                         14
 
 as  amended  by  section 29 of part A of chapter 20 of the laws of 2015,
 are amended to read as follows:
   (5-a)  provides  that,  notwithstanding any provision of this chapter,
 the legal regulated rent for any vacancy lease entered  into  after  the
 effective  date  of  this  paragraph shall be as hereinafter provided in
 this paragraph. The previous  legal  regulated  rent  for  such  housing
 accommodation  shall  be  increased by the following: (i) if the vacancy
 lease is for a term of two years, twenty percent of the  previous  legal
 regulated  rent;  or (ii) if the vacancy lease is for a term of one year
 the increase shall be twenty percent of  the  previous  legal  regulated
 rent  less  an  amount  equal to the difference between (a) the two year
 renewal lease guideline promulgated by the guidelines board of the  city
 of New York applied to the previous legal regulated rent and (b) the one
 year  renewal lease guideline promulgated by the guidelines board of the
 city of New York applied to the previous legal regulated rent.  However,
 where  the amount charged and paid by the prior tenant pursuant to para-
 graph fourteen of this subdivision, was less than  the  legal  regulated
 rent,  such  increase to the legal regulated rent shall not exceed: five
 percent of the previous legal regulated rent if the last  vacancy  lease
 commenced  less  than  two  years ago; ten percent of the previous legal
 regulated rent if the last vacancy lease commenced less than three years
 ago; fifteen percent of the previous legal regulated rent  if  the  last
 vacancy  lease commenced less than four years ago; twenty percent of the
 previous legal regulated rent if the last vacancy lease  commenced  four
 or  more  years  ago.  In  addition, if the legal regulated rent was not
 increased with respect to such  housing  accommodation  by  a  permanent
 vacancy  allowance  within eight years prior to a vacancy lease executed
 on or after the effective date of this paragraph,  the  legal  regulated
 rent  may be further increased by an amount equal to the product result-
 ing from multiplying such previous legal regulated rent by six-tenths of
 one percent and further multiplying the amount of rent increase  result-
 ing  therefrom by the greater of (A) the number of years since the impo-
 sition of the last permanent vacancy allowance, or (B) if the  rent  was
 not  increased by a permanent vacancy allowance since the housing accom-
 modation became subject to this chapter, the number of years  that  such
 housing accommodation has been subject to this chapter. Provided that if
 the  previous  legal  regulated rent was less than three hundred dollars
 the total increase shall be as calculated above plus one hundred dollars
 per month. Provided, further, that if the previous legal regulated  rent
 was at least three hundred dollars and no more than five hundred dollars
 in  no event shall the total increase pursuant to this paragraph be less
 than one hundred dollars per month. Such increase shall be  in  lieu  of
 any allowance authorized for the one or two year renewal component ther-
 eof, but shall be in addition to any other increases authorized pursuant
 to  this  chapter  including  an  adjustment based upon [a major capital
 improvement, or] a substantial  modification  or  increase  of  dwelling
 space  or  services, or installation of new equipment or improvements or
 new furniture or furnishings provided in or to the housing accommodation
 pursuant to this section. The increase authorized in this paragraph  may
 not  be  implemented  more  than one time in any calendar year, notwith-
 standing the number of vacancy leases entered into in such year.
   (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

 S. 9154--A                         15
 
 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].  Notwithstand-
 ing 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 management 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 incre-
 ments and added to the stabilized rent as established or set  in  future
 years;
   §  14.  Subdivision  f of section 26-512 of the administrative code of
 the city of New York, as added by chapter 116 of the laws  of  1997,  is
 amended to read as follows:
   f.  Notwithstanding  any  provision of this law to the contrary in the
 case where all tenants named in a lease have permanently vacated a hous-
 ing accommodation and a family member of such tenant or tenants is enti-
 tled to and executes a renewal lease for the  housing  accommodation  if
 such accommodation continues to be subject to this law after such family
 member  vacates,  on  the occurrence of such vacancy the legal regulated
 rent shall be increased by a sum equal to the allowance then  in  effect

 S. 9154--A                         16
 
 for vacancy leases, including the amount allowed by paragraph [(five-a)]
 FIVE-A  of  subdivision  c  of section 26-511 of this law. Such increase
 shall be in addition to any other increases provided  for  in  this  law
 including  an  adjustment based upon [a major capital improvement, or] a
 substantial modification or increase of dwelling space or  services,  or
 installation  of  new  equipment  or  improvements  or  new furniture or
 furnishings provided in or to  the  housing  accommodation  pursuant  to
 section  26-511  of  this  law and shall be applicable in like manner to
 each second subsequent succession.
   § 15. This act shall take effect immediately; provided:
   (a) that sections three, four, and five of this  act  shall  apply  to
 taxable years beginning on and after January 1, 2019;
   (b)  that  the amendments to sections 4 and 5 of the emergency housing
 rent control law made by section 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 in subdivision 2 of section 1 of chapter 274 of the
 laws of 1946;
   (c) that the amendments to sections 6 and 10 of section 4 of the emer-
 gency tenant protection act of nineteen seventy-four  made  by  sections
 seven  and  eight  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;
   (d)  that the amendments to section 26-511 of chapter 4 of title 26 of
 the administrative code of the city of New York made by section thirteen
 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;
   (e) that the amendments to section 26-512 of chapter 4 of title 26  of
 the administrative code of the city of New York made by section fourteen
 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
   (f) that the amendments to sections 26-403.2, 26-405 and 26-407 of the
 city  rent and rehabilitation law made by sections nine, ten, eleven and
 twelve 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.
   (g) Effective immediately, the addition, amendment  and/or  repeal  of
 any  rule  or regulation necessary for the implementation of this act on
 its effective date are authorized and directed to be made and  completed
 on or before such effective date.