S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
     S. 1597                                                   A. 935
 
                        2017-2018 Regular Sessions
 
                       S E N A T E - A S S E M B L Y
 
                             January 10, 2017
                                ___________
 
 IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
   ed, and when printed to be committed to the Committee on Local Govern-
   ment
 
 IN  ASSEMBLY  -- Introduced by M. of A. THIELE -- read once and referred
   to the Committee on Local Governments

 AN ACT to amend the town law, in relation to authorizing  certain  towns
   in  the  Peconic Bay region to establish community housing opportunity
   funds, provided that such towns adopt a housing plan adhering to smart
   growth principles in conjunction with the creation of  such  community
   housing opportunity fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings. The  legislature  hereby  finds  that
 chapter  114  of  the laws of 1998 enacted provisions of law relating to
 Peconic Bay region community preservation funds. Such chapter  permitted
 the  five  towns of the Peconic Bay region to establish a dedicated fund
 for the acquisition of interests in real property for  the  purposes  of
 open  space,  farmland,  and  historic preservation, as well as park and
 recreation purposes. The revenue for such fund was derived  from  a  two
 percent  real  estate transfer tax. Community preservation funds in each
 of the five Peconic Bay region towns  were  approved  overwhelmingly  by
 public referendum.
   The  enactment  of  this  land  preservation  has  been  an incredible
 success.  The program has received national recognition for its  innova-
 tive and creative approach to community preservation.
   Just  as critical to the future of the Peconic Bay region is the human
 need to protect community stability by providing for an adequate  supply
 of  community  housing opportunities for all segments of the Peconic Bay
 community. The availability  of  affordable  housing  opportunities  for
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02093-01-7
              

 S. 1597                             2                             A. 935
 
 moderate  income  and  working  class  residents  is in critically short
 supply.
   The  adverse  impacts  from this shortage of housing opportunities are
 critical. For  example,  local  employers  have  difficulty  hiring  and
 retaining  employees  because  of  housing costs and availability. Local
 volunteer emergency services agencies experience difficulty in  recruit-
 ment  and  retention.  Long time residents are forced to leave the area.
 Traffic congestion is exacerbated by the importation of labor from areas
 with lower housing costs. Other land  uses  such  as  motels  are  being
 converted  to  emergency  and  permanent housing.   Finally, the lack of
 affordable housing is resulting in residents being  forced  to  live  in
 substandard, illegal conditions.
   Unique  demographics  and  economics  in the Peconic Bay region, and a
 lack of affordable dwelling units, are creating this  housing  shortage.
 The combination of the Peconic Bay region's attractiveness, proximity to
 the  dense population of the New York metropolitan region, and proximity
 to that region's extraordinary wealth, makes the Peconic  Bay  region  a
 prime location for seasonal and luxury homes.
   While this combination of extraordinary attractiveness, population and
 wealth has created a strong local economy for the Peconic Bay region, it
 has resulted in housing problems for local families.
   In  summary,  the  demand  of  land  for luxury and seasonal homes and
 seasonal rentals has left a short supply of  housing  opportunities  for
 moderate  income  and  working  class  local  residents. The Peconic Bay
 region needs a balanced housing policy where there exists a  variety  of
 housing types and opportunities across the region's economic spectrum.
   The  Peconic  Bay  region  requires the same creativity, planning, and
 community consensus that resulted in the community preservation fund  in
 order  to  address  the issue of housing opportunity. Further, increased
 housing opportunities must be accomplished in the  context  of  rational
 long term planning.
   It is the purpose of this legislation, to give the towns of the Pecon-
 ic  Bay region the authority and resources needed to establish community
 housing opportunities. Specifically, this legislation would permit  each
 town  to  establish  a  dedicated  community housing opportunity fund to
 increase housing  opportunities  in  the  region.  Such  fund  shall  be
 financed  by  a  combination  of  state and local funds. Further, a town
 housing plan adhering to smart growth principles would be required to be
 approved and implemented to insure that these new housing  opportunities
 are  enacted  in  the context of a comprehensive plan. The fund shall be
 enacted by local law subject to a mandatory referendum.
   § 2. This act shall be known and may be  cited  as  the  "Peconic  Bay
 region community housing opportunity act".
   §  3.  The town law is amended by adding a new section 64-k to read as
 follows:
   § 64-K. PECONIC BAY REGION COMMUNITY HOUSING  OPPORTUNITY  FUND.    1.
 DEFINITIONS.  AS  USED  IN  THIS  SECTION, THE FOLLOWING WORDS AND TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "PECONIC BAY REGION" MEANS THE TOWNS OF EAST  HAMPTON,  RIVERHEAD,
 SHELTER ISLAND, SOUTHAMPTON, AND SOUTHOLD.
   (B)  "COMMUNITY  HOUSING"  SHALL  BE DEFINED AS HOUSING FOR HOUSEHOLDS
 WITH INCOMES AT OR BELOW THE MEDIAN INCOME  FOR  EACH  TOWN  WITHIN  THE
 PECONIC BAY REGION.
   (C) "BOARD" MEANS THE ADVISORY BOARD CREATED PURSUANT TO THIS SECTION.
   (D)  "FUND"  MEANS  THE  COMMUNITY HOUSING OPPORTUNITY FUND AUTHORIZED
 PURSUANT TO THIS SECTION.

 S. 1597                             3                             A. 935
 
   (E) "EDUCATION IMPACT PAYMENT" MEANS A PAYMENT MADE FROM THE  FUND  TO
 SCHOOL  DISTRICTS NOT TO EXCEED AN AMOUNT EQUAL TO THE ADDITIONAL ANNUAL
 COST OF EDUCATING THE NUMBER OF STUDENTS THAT WILL BE ADDED TO A  SCHOOL
 DISTRICT  AS A RESULT OF THE PRODUCTION OF COMMUNITY HOUSING PURSUANT TO
 THE FUND.
   2.  FUND  AUTHORIZED.  THE  TOWN  BOARD OF ANY TOWN IN THE PECONIC BAY
 REGION IS AUTHORIZED TO ESTABLISH  BY  LOCAL  LAW  A  COMMUNITY  HOUSING
 OPPORTUNITY  FUND,  PURSUANT TO THE PROVISIONS OF THIS SECTION. DEPOSITS
 INTO THE FUND MAY INCLUDE REVENUES OF THE LOCAL GOVERNMENT FROM WHATEVER
 SOURCE, INCLUDING BUT NOT LIMITED TO:  (A) ALL PROCEEDS FROM ANY INDEBT-
 EDNESS OR OBLIGATIONS ISSUED PURSUANT  TO  THE  LOCAL  FINANCE  LAW  FOR
 COMMUNITY  HOUSING  OPPORTUNITY  PURPOSES AS PROVIDED FOR IN SUBDIVISION
 THREE OF THIS SECTION; (B) GENERAL FUND BALANCES OR SURPLUSES; (C) FUNDS
 RECEIVED BY THE TOWN FROM THE APPORTIONMENT OF MORTGAGE RECORDING  TAXES
 RECEIVED  FROM THE COUNTY PURSUANT TO ARTICLE ELEVEN OF THE TAX LAW; (D)
 FUNDS RECEIVED BY THE TOWN FROM THE SALE OF DEVELOPMENT  RIGHTS  FROM  A
 CENTRAL  BANK  CREATED PURSUANT TO SECTION SIXTY-FOUR-E OF THIS ARTICLE;
 (E) ANY PROCEEDS RECEIVED BY THE  LOCAL  GOVERNMENT  FROM  THE  SALE  OF
 AFFORDABLE HOUSING PRODUCED FROM REVENUES OF THE FUND; (F) THE REPAYMENT
 OF  ANY  LOANS ISSUED FROM PROCEEDS OF THE FUND; (G) ANY GIFTS OF INTER-
 ESTS IN LAND OR FUNDS; (H) ANY STATE OR FEDERAL GRANTS RECEIVED  BY  THE
 TOWN  FOR PROVIDING AFFORDABLE HOMES; AND (I) FUNDS RECEIVED BY THE TOWN
 FROM FEES PAID TO THE TOWN PURSUANT TO AN INCLUSIONARY ZONING LAW  WHERE
 AUTHORIZED BY THE LEGISLATURE. INTEREST ACCRUED BY MONIES DEPOSITED INTO
 THE FUND SHALL BE CREDITED TO THE FUND.  IN NO EVENT SHALL MONIES DEPOS-
 ITED  INTO  THE  FUND  BE  TRANSFERRED  TO  ANY  OTHER  ACCOUNT. NOTHING
 CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO PREVENT THE FINANCING IN
 WHOLE OR IN PART, PURSUANT TO THE LOCAL FINANCE LAW, OF ANY  PROJECT  OR
 PURPOSE  AUTHORIZED  PURSUANT TO THIS SECTION.  MONIES FROM THE FUND MAY
 BE UTILIZED TO REPAY INDEBTEDNESS OR OBLIGATIONS  INCURRED  PURSUANT  TO
 THE  LOCAL FINANCE LAW CONSISTENT WITH EFFECTUATING THE PURPOSES OF THIS
 SECTION.
   3. PURPOSES OF THE FUND. THE PROCEEDS OF THE FUND ESTABLISHED PURSUANT
 TO SUBDIVISION TWO OF THIS SECTION SHALL BE UTILIZED FOR  THE  FOLLOWING
 PURPOSES:
   (A)  THE  PROVISION  OF  NO-INTEREST OR LOW-INTEREST LOANS TO ELIGIBLE
 RESIDENTS OF THE TOWN FOR THE PURCHASE OF A FIRST HOME;
   (B) THE ACTUAL PRODUCTION OF COMMUNITY HOUSING FOR  SALE  TO  ELIGIBLE
 INDIVIDUALS BY THE TOWN;
   (C)  THE  ACTUAL  PRODUCTION OF COMMUNITY HOUSING FOR SALE TO ELIGIBLE
 INDIVIDUALS IN CONJUNCTION WITH A PUBLIC/PRIVATE PARTNERSHIP, WHERE  THE
 PRIVATE  PARTNER  AGREES TO COMPLY WITH THE PROFIT GUIDELINES OF THE NEW
 YORK STATE AFFORDABLE HOUSING CORPORATION;
   (D) THE ACTUAL PRODUCTION AND MAINTENANCE OF RENTAL HOUSING  FOR  RENT
 TO  ELIGIBLE INDIVIDUALS EITHER BY THE TOWN, THE TOWN HOUSING AUTHORITY,
 OR IN CONJUNCTION WITH A PUBLIC/PRIVATE PARTNERSHIP, WHERE  THE  PRIVATE
 PARTNER  AGREES  TO  COMPLY  WITH  THE PROFIT GUIDELINES OF THE NEW YORK
 STATE AFFORDABLE HOUSING CORPORATION;
   (E) THE REHABILITATION OF EXISTING BUILDINGS  AND  STRUCTURES  IN  THE
 TOWN  FOR  THE  PURPOSE  OF  CONVERSION TO COMMUNITY HOUSING FOR SALE OR
 RENTAL TO ELIGIBLE INDIVIDUALS;
   (F) THE PROVISION OF HOUSING  COUNSELING  SERVICES  BY  NOT-FOR-PROFIT
 CORPORATIONS WHO ARE AUTHORIZED BY THE UNITED STATES DEPARTMENT OF HOUS-
 ING AND URBAN DEVELOPMENT TO PROVIDE SUCH SERVICES; AND
   (G)  THE PROVISION OF EDUCATION IMPACT PAYMENTS TO SCHOOL DISTRICTS AS
 DEFINED IN PARAGRAPH (E) OF SUBDIVISION ONE OF THIS SECTION.

 S. 1597                             4                             A. 935

   FOR THE PURPOSES OF THIS SUBDIVISION, ELIGIBLE  EXPENSES  RELATING  TO
 THE  PRODUCTION  OF COMMUNITY HOUSING AND THE REHABILITATION OF EXISTING
 BUILDINGS AND STRUCTURES UNDER THE FUND SHALL INCLUDE BUT NOT BE LIMITED
 TO LAND ACQUISITION,  PLANNING,  ENGINEERING,  CONSTRUCTION  COSTS,  AND
 OTHER HARD AND SOFT COSTS DIRECTLY RELATED TO THE CONSTRUCTION, REHABIL-
 ITATION,  PURCHASE  OR  RENTAL OF HOUSING PURSUANT TO THIS SECTION.  ALL
 REVENUES RECEIVED BY THE TOWN FROM  THE  SALE  OR  RENTAL  OF  COMMUNITY
 HOMES, OR THE REPAYMENT OF LOANS SHALL BE DEPOSITED IN THE FUND.
   4.  ADVISORY  BOARD  ESTABLISHED.  THE  TOWN  BOARD OF ANY TOWN IN THE
 PECONIC BAY REGION WHICH HAS ESTABLISHED A COMMUNITY HOUSING OPPORTUNITY
 FUND PURSUANT TO THIS SECTION SHALL CREATE AN ADVISORY BOARD  TO  REVIEW
 AND MAKE RECOMMENDATIONS REGARDING THE TOWN'S COMMUNITY HOUSING PROGRAM.
 SUCH  BOARD  SHALL  CONSIST OF NOT LESS THAN SEVEN NOR MORE THAN FIFTEEN
 LEGAL RESIDENTS OF THE MUNICIPALITY  WHO  SHALL  SERVE  WITHOUT  COMPEN-
 SATION.  NO  MEMBER  OF  THE  LOCAL  LEGISLATIVE BODY SHALL SERVE ON THE
 BOARD. THE BOARD SHALL INCLUDE A REPRESENTATIVE OF:   (A)  THE  BUILDING
 INDUSTRY;  (B)  THE  REAL ESTATE INDUSTRY; (C) THE BANKING INDUSTRY; AND
 THREE REPRESENTATIVES OF LOCAL HOUSING ADVOCACY OR HUMAN SERVICES ORGAN-
 IZATIONS. WHERE A VILLAGE OR VILLAGES, LOCATED  WITHIN  THE  TOWN,  HAVE
 ELECTED  TO  PARTICIPATE  IN THE FUND, AS PROVIDED IN SUBDIVISION SIX OF
 THIS SECTION, THE BOARD SHALL INCLUDE AT LEAST ONE RESIDENT OF A PARTIC-
 IPATING VILLAGE OR VILLAGES. WHERE AN INDIAN NATION  IS  LOCATED  WITHIN
 THE  BOUNDARIES  OF  A TOWN, THE BOARD SHALL INCLUDE AT LEAST ONE MEMBER
 FROM SUCH NATION. THE BOARD SHALL ACT IN AN  ADVISORY  CAPACITY  TO  THE
 TOWN BOARD.
   5. ADOPTION OF HOUSING PLAN. (A) BEFORE A TOWN MAY ESTABLISH THE FUND,
 THE  TOWN  BOARD SHALL FIRST ADOPT A TOWN HOUSING PLAN WHICH ESTABLISHES
 AN IMPLEMENTATION PLAN FOR THE PROVISION OF COMMUNITY  HOUSING  OPPORTU-
 NITIES  BY  THE  FUND, AND A LOCAL LAW IMPLEMENTING SAID PLAN. SUCH PLAN
 SHALL ADHERE TO THE FOLLOWING SMART GROWTH PRINCIPLES:
   (1) PUBLIC INVESTMENT. TO ACCOUNT FOR AND MINIMIZE  SOCIAL,  ECONOMIC,
 AND  ENVIRONMENTAL  COSTS  OF  NEW DEVELOPMENT, INCLUDING INFRASTRUCTURE
 COSTS SUCH AS TRANSPORTATION, SEWERS, AND WASTEWATER  TREATMENT,  WATER,
 SCHOOLS, RECREATION, AND LOSS OF OPEN SPACE AND AGRICULTURAL LAND;
   (2)  DEVELOPMENT.  TO ENCOURAGE DEVELOPMENT IN AREAS WHERE TRANSPORTA-
 TION, WATER, AND SEWAGE INFRASTRUCTURE ARE AVAILABLE OR PRACTICAL;
   (3) CONSERVATION.  TO  PROTECT,  PRESERVE,  AND  ENHANCE  THE  STATE'S
 RESOURCES, INCLUDING AGRICULTURAL LAND, FORESTS, SURFACE WATERS, GROUND-
 WATER, RECREATION AND OPEN SPACE, SCENIC AREAS, AND SIGNIFICANT HISTORIC
 AND ARCHEOLOGICAL SITES;
   (4)  COORDINATION.  TO PROMOTE COORDINATION OF STATE AND LOCAL GOVERN-
 MENT DECISIONS AND COOPERATION AMONG COMMUNITIES TO WORK TOWARD THE MOST
 EFFICIENT, PLANNED AND COST-EFFECTIVE DELIVERY  OF  GOVERNMENT  SERVICES
 BY,  AMONG  OTHER MEANS, FACILITATING COOPERATIVE AGREEMENTS AMONG ADJA-
 CENT COMMUNITIES, AND TO COORDINATE PLANNING TO ENSURE COMPATIBILITY  OF
 ONE'S COMMUNITY DEVELOPMENT WITH DEVELOPMENT OF NEIGHBORING COMMUNITIES;
   (5)  COMMUNITY  DESIGN.  TO STRENGTHEN COMMUNITIES THROUGH DEVELOPMENT
 AND REDEVELOPMENT STRATEGIES THAT INCLUDE INTEGRATION OF ALL INCOME  AND
 AGE GROUPS, MIXED LAND USES, AND COMPACT DEVELOPMENT, TRADITIONAL NEIGH-
 BORHOOD  DEVELOPMENT,  PLANNED  UNIT  DEVELOPMENT, OPEN SPACE DISTRICTS,
 DOWNTOWN REVITALIZATION, BROWNFIELD REDEVELOPMENT,  ENHANCED  BEAUTY  IN
 PUBLIC  SPACES,  AND DIVERSE AND COMMUNITY HOUSING IN CLOSE PROXIMITY TO
 PLACES OF EMPLOYMENT, RECREATION, AND COMMERCIAL DEVELOPMENT;
   (6)  TRANSPORTATION.  TO  PROVIDE  TRANSPORTATION  CHOICES,  INCLUDING
 INCREASING  PUBLIC  TRANSIT  AND ALTERNATIVE MODES OF TRANSPORTATION, IN

 S. 1597                             5                             A. 935
 
 ORDER TO REDUCE AUTOMOBILE DEPENDENCY, TRAFFIC CONGESTION,  AND  AUTOMO-
 BILE POLLUTION;
   (7)  CONSISTENCY.  TO  INSURE  PREDICTABILITY IN BUILDING AND LAND USE
 CODES;
   (8) COMMUNITY  COLLABORATION.  TO  PROVIDE  FOR  AND  ENCOURAGE  LOCAL
 GOVERNMENTS  TO DEVELOP, THROUGH A COLLABORATIVE COMMUNITY-BASED EFFORT,
 SMART GROWTH PLANS THAT INCLUDE LONG TERM LAND USE AND  PERMIT  PREDICT-
 ABILITY  AND COORDINATION, EFFICIENT DECISION MAKING AND PLANNING IMPLE-
 MENTATION.
   (B) SUCH PLAN MAY INCLUDE THE ESTABLISHMENT OF  A  MAP  OR  MAPS  THAT
 DELINEATE  THE  HOUSING  IMPLEMENTATION  RECOMMENDATIONS PROPOSED BY THE
 TOWN.
   (C) THE PLAN AND THE LOCAL LAW IMPLEMENTING  THE  PLAN  SHALL  NOT  BE
 ADOPTED  UNTIL  AFTER  A PUBLIC HEARING HAS BEEN HELD BY THE TOWN BOARD.
 SUCH PLAN SHALL BE UPDATED AT LEAST ONCE EVERY FIVE YEARS. SUCH PLAN AND
 LOCAL LAW SHALL BE ADOPTED AT LEAST  SIXTY  DAYS  BEFORE  THE  MANDATORY
 REFERENDUM REQUIRED BY SUBDIVISION SEVEN OF THIS SECTION.
   (D) THE TOWN HOUSING PLAN SHALL BE AN ELEMENT OF THE TOWN'S COMPREHEN-
 SIVE PLAN.
   (E)  SUCH  HOUSING PLAN SHALL ALSO PROVIDE FOR INCOME AND OTHER ELIGI-
 BILITY REQUIREMENTS FOR COMMUNITY  HOUSING,  INCLUDING  ANY  ELIGIBILITY
 PREFERENCE  THAT  MAY  BE  GIVEN BASED UPON RESIDENCY OR OTHER CRITERIA.
 SUCH PLAN SHALL ALSO PROVIDE  FOR  THE  LEGAL  MECHANISM  THAT  WILL  BE
 EMPLOYED  TO MAINTAIN THE HOUSING STOCK CREATED PURSUANT TO THIS SECTION
 AT COMMUNITY LEVELS. THE RESALE OF COMMUNITY HOUSING TO THE  PUBLIC  FOR
 OCCUPANCY CREATED PURSUANT TO THIS SECTION TO OTHER THAN INCOME ELIGIBLE
 HOUSEHOLDS SHALL BE PROHIBITED.
   (F)  SUCH  HOUSING  PLAN SHALL ALSO PROVIDE FOR THE EQUITABLE DISTRIB-
 UTION OF COMMUNITY HOUSING  OPPORTUNITIES  AMONG  ALL  THE  HAMLETS  AND
 COMMUNITIES  OF THE TOWN. THE PLAN SHALL INSURE THAT NO HAMLET OR COMMU-
 NITY IS SITED FOR AN UNDUE CONCENTRATION OF COMMUNITY  HOUSING  OPPORTU-
 NITIES  THAT  WOULD  SUBSTANTIALLY  ALTER THE CHARACTER OF THE HAMLET OR
 COMMUNITY. IN DETERMINING EQUITABLE DISTRIBUTION  OF  COMMUNITY  HOUSING
 OPPORTUNITIES,  EXISTING  COMMUNITY HOUSING OPPORTUNITIES IN A HAMLET OR
 COMMUNITY SHALL BE CONSIDERED.
   6. VILLAGE AND INDIAN NATION PARTICIPATION. (A) THE  PARTICIPATION  OF
 ANY  VILLAGE  OR  INDIAN  NATION  IN  THE  COMMUNITY HOUSING OPPORTUNITY
 PROGRAM AUTHORIZED BY THIS SECTION SHALL BE AT THE OPTION OF THE VILLAGE
 OR INDIAN NATION. IN ORDER TO PARTICIPATE, A VILLAGE  OR  INDIAN  NATION
 SHALL  PASS  A  RESOLUTION OPTING INTO THE PROGRAM AND SHALL SUBMIT SAID
 RESOLUTION TO THE TOWN BOARD.
   (B) WHERE A VILLAGE OR INDIAN NATION OPTS TO PARTICIPATE  PURSUANT  TO
 THIS  SUBDIVISION,  AN  INTERGOVERNMENTAL  AGREEMENT  SHALL  BE EXECUTED
 PURSUANT TO ARTICLE FIVE-G OF THE GENERAL MUNICIPAL LAW OR OTHER  APPLI-
 CABLE LEGAL AUTHORITY, IN ORDER TO ESTABLISH THE RIGHTS AND RESPONSIBIL-
 ITIES OF EACH GOVERNMENT REGARDING COMMUNITY HOUSING OPPORTUNITIES.
   7.  MANDATORY  REFERENDUM.  THE LOCAL LAW OR LAWS ADOPTING THE HOUSING
 PLAN AND ESTABLISHING THE COMMUNITY HOUSING OPPORTUNITY  FUND  SHALL  BE
 SUBJECT  TO  A  MANDATORY  REFERENDUM. SUCH LOCAL LAW OR LAWS SHALL ONLY
 BECOME EFFECTIVE UPON THE ADOPTION OF SAID REFERENDUM BY THE ELECTORS OF
 THE TOWN.
   § 4. Subdivision 10 of section 64-e of the town  law,  as  amended  by
 chapter 551 of the laws of 2015, is amended to read as follows:
   10.  [Rights]  EXCEPT  AS  PROVIDED FOR HEREIN, RIGHTS or interests in
 real property acquired with monies from such fund  shall  not  be  sold,
 leased,  exchanged,  donated, or otherwise disposed of or used for other

 S. 1597                             6                             A. 935
 
 than the purposes permitted by this section without the express authori-
 ty of an act of the legislature, which shall  provide  for  the  substi-
 tution of other lands of equal environmental value and fair market value
 and reasonably equivalent usefulness and location to those to be discon-
 tinued,  sold  or  disposed  of, and such other requirements as shall be
 approved by the legislature.  Nothing in this section shall  preclude  a
 town,  by  local  law,  from establishing additional restrictions to the
 alienation of lands acquired pursuant to this section. This  subdivision
 shall  not  apply  to  the sale of development rights by a town acquired
 pursuant to this section, where said sale is  made  by  a  central  bank
 created  by a town, pursuant to a transfer of development rights program
 established by a town pursuant to section  two  hundred  sixty-one-a  of
 this  chapter,  provided,  however  (a)  that  the lands from which said
 development rights were acquired shall remain preserved in perpetuity by
 a permanent conservation easement or  other  instrument  that  similarly
 preserves the community character referenced in subdivision four of this
 section,  and  (b) the proceeds from such sale shall be deposited in the
 community preservation fund OR THE COMMUNITY  HOUSING  OPPORTUNITY  FUND
 PURSUANT TO SECTION SIXTY-FOUR-K OF THIS ARTICLE.
   §  5.  Applicability.  Nothing shall preclude a town from transferring
 development rights acquired after the effective date of chapter  114  of
 the  laws  of  1998 but before the effective date of this section into a
 central bank.
   § 6. Severability clause. If any provision of this act or  application
 thereof  shall  for  any  reason  be  adjudged by any court of competent
 jurisdiction to be invalid, such judgment shall not affect,  impair,  or
 invalidate the remainder of the act, but shall be confined in its opera-
 tion  to  the  provision thereof directly involved in the controversy in
 which the judgment shall have been rendered.
   § 7. This act shall take effect immediately.