S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4058--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 2, 2017
                                ___________
 
 Introduced  by  Sens.  LITTLE,  ADDABBO, AKSHAR, AVELLA, BROOKS, COMRIE,
   CROCI,  DeFRANCISCO,  DILAN,  FUNKE,  GALLIVAN,  GIANARIS,   HAMILTON,
   HANNON,  HELMING,  KAMINSKY,  KENNEDY,  LATIMER, MURPHY, O'MARA, ORTT,
   PHILLIPS, RANZENHOFER, RITCHIE, ROBACH, SANDERS, SAVINO, SEWARD, VALE-
   SKY, YOUNG -- read twice and ordered printed, and when printed  to  be
   committed  to  the  Committee  on  Housing, Construction and Community
   Development -- reported favorably from said committee and committed to
   the Committee  on  Finance  --  committee  discharged,  bill  amended,
   ordered reprinted as amended and recommitted to said committee
 
 AN  ACT  to amend the private housing finance law, in relation to estab-
   lishing the New York state first home savings program,  which  author-
   izes  first time home buyers to establish savings accounts to purchase
   a home; and to amend the  tax  law,  in  relation  to  establishing  a
   personal income tax deduction for deposits into such accounts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The private housing finance law is amended by adding a  new
 article 28 to read as follows:
                              ARTICLE XXVIII
                         NEW YORK STATE FIRST HOME
                              SAVINGS PROGRAM
 SECTION 1250. PROGRAM ESTABLISHED.
         1251. PURPOSES.
         1252. DEFINITIONS.
         1253. FUNCTIONS OF THE COMPTROLLER.
         1254. POWERS OF THE COMPTROLLER.
         1255. PROGRAM REQUIREMENTS; FIRST HOME SAVINGS ACCOUNT.
         1256. PROGRAM LIMITATIONS; FIRST HOME SAVINGS ACCOUNT.
   §  1250. PROGRAM ESTABLISHED. THERE IS HEREBY ESTABLISHED A FIRST HOME
 SAVINGS PROGRAM AND SUCH PROGRAM SHALL BE KNOWN AND MAY BE CITED AS  THE
 "NEW YORK STATE FIRST HOME SAVINGS PROGRAM".

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

                                                            LBD00765-09-7

 S. 4058--A                          2
 
   §  1251.  PURPOSES.  THE PURPOSES OF THE PROGRAM SHALL BE TO AUTHORIZE
 THE ESTABLISHMENT OF FIRST HOME SAVINGS ACCOUNTS AND TO  PROVIDE  GUIDE-
 LINES FOR THE MAINTENANCE OF SUCH ACCOUNTS TO:
   1.  ENABLE  RESIDENTS  OF THIS STATE TO BENEFIT FROM THE TAX INCENTIVE
 PROVIDED FOR QUALIFIED STATE FIRST HOME SAVINGS ACCOUNTS  UNDER  SECTION
 SIX HUNDRED TWELVE OF THE TAX LAW; AND
   2.  INCENTIVIZE  RESIDENTS  TO  SAVE  FOR THE PURCHASE OF A FIRST HOME
 WITHIN THE STATE.
   § 1252. DEFINITIONS. AS USED IN  THIS  ARTICLE,  THE  FOLLOWING  TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "ACCOUNT" OR "FIRST HOME SAVINGS ACCOUNT" SHALL MEAN AN INDIVIDUAL
 SAVINGS ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE  PROVISIONS  OF  THIS
 ARTICLE  FOR  THE  EXCLUSIVE  BENEFIT OF THE ACCOUNT OWNER OR DESIGNATED
 BENEFICIARY THAT IS THE FIRST TIME BUYER OF A HOME, TOWNHOME,  CONDOMIN-
 IUM OR UNIT IN A COOPERATIVE HOUSING CORPORATION.
   2.  "ACCOUNT OWNER" SHALL MEAN A TAXPAYER WHO ENTERS INTO A FIRST HOME
 SAVINGS AGREEMENT PURSUANT TO THE PROVISIONS OF THIS ARTICLE,  INCLUDING
 A  PERSON  WHO  ENTERS INTO SUCH AN AGREEMENT AS A FIDUCIARY OR AGENT ON
 BEHALF OF A TRUST, ESTATE, PARTNERSHIP, ASSOCIATION, COMPANY  OR  CORPO-
 RATION.
   3.  "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT OR
 ACCOUNTS, THE DESIGNATED INDIVIDUAL OR INDIVIDUALS    WHOSE  FIRST  HOME
 PURCHASE EXPENSES ARE EXPECTED TO BE PAID FROM THE ACCOUNT OR ACCOUNTS.
   4.  "FINANCIAL  ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO
 DO BUSINESS IN THE STATE, AND (A) WHICH IS AN  AUTHORIZED  FIDUCIARY  TO
 ACT  AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS ENTI-
 TLED  "EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT  OF  1974",  AS  SUCH
 PROVISIONS  MAY  BE  AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPANY;
 AND (B)(I) IS LICENSED OR  CHARTERED  BY  THE  DEPARTMENT  OF  FINANCIAL
 SERVICES,  (II)  IS  CHARTERED  BY  AN AGENCY OF THE FEDERAL GOVERNMENT,
 (III) IS SUBJECT TO THE JURISDICTION AND REGULATION  OF  THE  SECURITIES
 AND  EXCHANGE  COMMISSION  OF  THE FEDERAL GOVERNMENT, (IV) 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, (V) OR ANY BANKING ORGANIZATION AS DEFINED IN SUBDIVISION
 ELEVEN OF SECTION TWO OF THE BANKING LAW, NATIONAL BANKING  ASSOCIATION,
 STATE  CHARTERED  CREDIT  UNION,  FEDERAL  MUTUAL  SAVINGS BANK, FEDERAL
 SAVINGS AND LOAN ASSOCIATION OR FEDERAL CREDIT UNION.
   5. "FIRST TIME HOME BUYER" SHALL MEAN AN  INDIVIDUAL  OR  INDIVIDUALS,
 NEITHER  OF  WHOM  HAS OR HAD AN OWNERSHIP INTEREST IN A PRINCIPAL RESI-
 DENCE AT ANY TIME, INCLUDING RESIDENCES OWNED IN THE  UNITED  STATES  OR
 ABROAD.    NO SUCH PERSON SHALL OWN ANY OTHER HOME INCLUDING VACATION OR
 INVESTMENT RESIDENCES, INCLUDING RESIDENCES OWNED IN THE  UNITED  STATES
 OR  ABROAD,  EXCEPT AS OTHERWISE PROVIDED IN THIS SUBDIVISION. IF EITHER
 THE INDIVIDUAL OR INDIVIDUALS ARE NOT FIRST TIME  HOME  BUYERS,  NEITHER
 THE  INDIVIDUAL  OR  INDIVIDUALS  SHALL  BE CONSIDERED A FIRST TIME HOME
 BUYER. IF AN INDIVIDUAL'S ONLY POTENTIALLY DISQUALIFYING PRESENT  OWNER-
 SHIP  INTEREST  IS OWNERSHIP OF A MOBILE OR MANUFACTURED HOME, THE INDI-
 VIDUAL SHALL BE CONSIDERED A FIRST TIME HOME BUYER AND SHALL BE ELIGIBLE
 FOR A FIRST HOME ACCOUNT DEDUCTION. FOR THE PURPOSES OF THIS  ARTICLE  A
 "MOBILE  OR  MANUFACTURED HOME" SHALL MEAN A STRUCTURE THAT IS VALUED AS
 PERSONAL PROPERTY AND NOT REAL PROPERTY. IF, DUE TO HIS OR HER OWNERSHIP
 OF A MOBILE OR MANUFACTURED HOME, THE  INDIVIDUAL  HAS  CLAIMED  A  REAL
 ESTATE  TAX OR HOME MORTGAGE DEDUCTION ON HIS OR HER PERSONAL INCOME TAX
 RETURNS, SUCH INDIVIDUAL SHALL NOT BE CONSIDERED A FIRST TIME HOME BUYER

 S. 4058--A                          3
 
 REGARDLESS OF WHETHER THE MOBILE OF  MANUFACTURED  HOME  WAS  CONSIDERED
 PERSONAL OR REAL PROPERTY.
   6.  "OWNERSHIP  INTEREST"  SHALL  MEAN  A FEE SIMPLE INTEREST, A JOINT
 TENANCY, A TENANCY IN COMMON, A TENANCY BY THE ENTIRETY, THE INTEREST OF
 A TENANT-SHARE HOLDER  IN  A  COOPERATIVE,  A  LIFE  ESTATE  OR  A  LAND
 CONTRACT.  INTERESTS WHICH DO NOT CONSTITUTE OWNERSHIP INTERESTS INCLUDE
 THE FOLLOWING: (A) REMAINDER INTERESTS, (B) A LEASE WITH OR  WITHOUT  AN
 OPTION  TO  PURCHASE,  (C) A MERE EXPECTANCY TO INHERIT AN INTEREST IN A
 RESIDENCE, (D) THE INTEREST THAT A PURCHASER OF A RESIDENCE ACQUIRES  ON
 THE  EXECUTION OF A PURCHASE CONTRACT AND (E) AN INTEREST IN REAL ESTATE
 OTHER THAN A RESIDENCE.
   7. "PROGRAM" SHALL MEAN THE NEW YORK FIRST HOME SAVINGS PROGRAM ESTAB-
 LISHED PURSUANT TO THIS ARTICLE.
   8. "QUALIFIED FIRST HOME PURCHASE EXPENSES" SHALL MEAN MONIES  APPLIED
 FOR  THE  PURCHASE OR CONSTRUCTION OF A HOUSE, TOWNHOUSE, CONDOMINIUM OR
 UNIT IN A COOPERATIVE HOUSING CORPORATION WITHIN THE STATE TO BE USED AS
 A PRIMARY RESIDENCE OF THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY FOR A
 PERIOD OF NOT LESS THAN TWO YEARS AFTER PURCHASE.
   9. "QUALIFIED RESIDENTIAL HOUSING"  SHALL  MEAN  A  HOUSE,  TOWNHOUSE,
 CONDOMINIUM  OR  UNIT  IN  A  COOPERATIVE HOUSING CORPORATION WITHIN THE
 STATE.
   10. "QUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT  TO
 PAY  THE  QUALIFIED  FIRST HOME PURCHASE EXPENSE OF THE ACCOUNT OWNER OR
 DESIGNATED BENEFICIARY OF THE ACCOUNT.
   11. "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN  ACCOUNT
 BUT SHALL NOT INCLUDE:
   (A) A QUALIFIED WITHDRAWAL;
   (B) A WITHDRAWAL MADE AS THE RESULT OF DEATH;
   (C) AN UNFORESEEABLE EMERGENCY; OR
   (D) NEED BASED UPON QUALIFYING FOR MILITARY SERVICE IN THE ARMED FORC-
 ES OF THE UNITED STATES AS DETERMINED BY RULES AN REGULATIONS PROMULGAT-
 ED BY THE COMPTROLLER.
   12. "COMPTROLLER" SHALL MEAN THE STATE COMPTROLLER.
   13.  "MANAGEMENT  CONTRACT"  SHALL  MEAN  THE CONTRACT EXECUTED BY THE
 COMPTROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY
 AND MANAGER OF THE PROGRAM.
   14. "FIRST HOME SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE
 COMPTROLLER OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
   15. "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED  BY
 THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
   16.  "COMMISSIONER"  SHALL  MEAN  THE  COMMISSIONER  OF  TAXATION  AND
 FINANCE.
   § 1253. FUNCTIONS OF THE COMPTROLLER.  1. THE COMPTROLLER SHALL IMPLE-
 MENT THE PROGRAM UNDER THE TERMS  AND  CONDITIONS  ESTABLISHED  BY  THIS
 ARTICLE AND A MEMORANDUM OF UNDERSTANDING WITH THE COMMISSIONER RELATING
 TO  ANY TERMS OR CONDITIONS NOT OTHERWISE EXPRESSLY PROVIDED FOR IN THIS
 ARTICLE.
   2. IN FURTHERANCE OF SUCH IMPLEMENTATION THE COMPTROLLER SHALL:
   (A) DEVELOP AND IMPLEMENT THE PROGRAM IN A MANNER CONSISTENT WITH  THE
 PROVISIONS  OF THIS ARTICLE THROUGH RULES AND REGULATIONS ESTABLISHED IN
 ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
   (B) ENGAGE THE SERVICES OF CONSULTANTS ON A CONTRACT BASIS FOR RENDER-
 ING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;
   (C) SEEK RULINGS AND OTHER GUIDANCE FROM THE UNITED STATES  DEPARTMENT
 OF TREASURY AND THE INTERNAL REVENUE SERVICE RELATING TO THE PROGRAM;

 S. 4058--A                          4
 
   (D)  MAKE  CHANGES TO THE PROGRAM REQUIRED FOR THE PARTICIPANTS IN THE
 PROGRAM TO OBTAIN THE STATE INCOME TAX BENEFITS OR TREATMENT PROVIDED BY
 THIS ARTICLE;
   (E) CHARGE, IMPOSE AND COLLECT ADMINISTRATIVE FEES AND SERVICE CHARGES
 IN  CONNECTION  WITH  ANY AGREEMENT, CONTRACT OR TRANSACTION RELATING TO
 THE PROGRAM;
   (F) DEVELOP MARKETING PLANS AND PROMOTION MATERIALS;
   (G) ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS  BE
 DISPERSED;
   (H)  ESTABLISH THE METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY FOR
 ADMINISTRATIVE COSTS; AND
   (I) DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT  THE  PURPOSES  OF
 THIS ARTICLE.
   §  1254.  POWERS  OF THE COMPTROLLER. 1. THE COMPTROLLER MAY IMPLEMENT
 THE PROGRAM THROUGH USE OF FINANCIAL ORGANIZATIONS AS ACCOUNT  DEPOSITO-
 RIES  AND  MANAGERS.  UNDER  THE PROGRAM, AN ACCOUNT OWNER MAY ESTABLISH
 ACCOUNTS DIRECTLY WITH AN ACCOUNT DEPOSITORY.
   2. 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:
   (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
   (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
   (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
 OF RESIDENTIAL HOUSING;
   (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
 AND REPORTING REQUIREMENTS;
   (E) THE FINANCIAL ORGANIZATION'S PLAN FOR PROMOTING  THE  PROGRAM  AND
 THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
   (F)  THE  FEES,  IF ANY, PROPOSED TO BE CHARGED TO PERSONS FOR OPENING
 ACCOUNTS;
   (G) THE MINIMUM INITIAL DEPOSIT AND  MINIMUM  CONTRIBUTIONS  THAT  THE
 FINANCIAL ORGANIZATION WILL REQUIRE;
   (H)  THE  ABILITY  OF BANKING ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
 DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
   (I) 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.
   3.  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.
   4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
 THE PROGRAM.
   5.  A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
 THE FINANCIAL ORGANIZATION TO:
   (A) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
 REQUIREMENTS  OF  SECTION  TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE AND
 ANY ACTIONS NOT CONTRARY TO ITS CONTRACT TO MANAGE THE PROGRAM TO QUALI-
 FY AS A "FIRST  HOME  SAVINGS  ACCOUNT"  UNDER  PARAGRAPH  FORTY-TWO  OF
 SUBSECTION (C) OF SECTION SIX HUNDRED TWELVE OF THE TAX LAW;
   (B)  KEEP  ADEQUATE  RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
 GATED FROM EACH OTHER ACCOUNT, AND  PROVIDE  THE  COMPTROLLER  WITH  THE

 S. 4058--A                          5
 
 INFORMATION  NECESSARY  TO  PREPARE  THE  STATEMENTS REQUIRED BY SECTION
 TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE;
   (C)  COMPILE AND TOTAL INFORMATION CONTAINED IN STATEMENTS REQUIRED TO
 BE PREPARED UNDER SECTION TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE  AND
 PROVIDE SUCH COMPILATIONS TO THE COMPTROLLER;
   (D) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
 WITH  SUCH  INFORMATION  NECESSARY  TO DETERMINE COMPLIANCE WITH SECTION
 TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE;
   (E) 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;
   (F) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
   (G)  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;
   (H) 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
   (I)  ENSURE THAT ANY DESCRIPTION OF THE PROGRAM, WHETHER IN WRITING OR
 THROUGH THE USE OF ANY MEDIA, IS CONSISTENT WITH THE MARKETING  PLAN  AS
 DEVELOPED  PURSUANT  TO  THE PROVISIONS OF SECTION TWELVE HUNDRED FIFTY-
 THREE OF THIS ARTICLE.
   6. 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.
   7.  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.
   8.  (A)  IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER
 OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
   (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
 AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
   (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
   (III) NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL  ORGANIZATION;
 AND
   (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
 ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
   (B)  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.
   9. THE COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECESSARY
 AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.

 S. 4058--A                          6
 
   §  1255.  PROGRAM  REQUIREMENTS;  FIRST HOME SAVINGS ACCOUNT. 1. FIRST
 HOME SAVINGS ACCOUNTS ESTABLISHED PURSUANT TO  THE  PROVISIONS  OF  THIS
 ARTICLE SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION.
   2.  A  FIRST  HOME  SAVINGS  ACCOUNT  MAY  BE OPENED BY ANY PERSON WHO
 DESIRES TO SAVE MONEY FOR  THE  PAYMENT  OF  THE  QUALIFIED  FIRST  HOME
 PURCHASE  EXPENSES  OF  THE  ACCOUNT OWNER OR DESIGNATED BENEFICIARY. AN
 ACCOUNT OWNER MAY DESIGNATE ANOTHER PERSON AS  SUCCESSOR  OWNER  OF  THE
 ACCOUNT  IN  THE  EVENT OF THE DEATH OF THE ORIGINAL ACCOUNT OWNER. SUCH
 PERSON WHO OPENS AN ACCOUNT OR ANY SUCCESSOR OWNER SHALL  BE  CONSIDERED
 THE ACCOUNT OWNER.
   (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
 THE PROGRAM AND CONTAIN THE FOLLOWING:
   (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
 CATION NUMBER OF THE ACCOUNT OWNER;
   (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
   (III)  THE NAME, ADDRESS, AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
 BENEFICIARY; AND
   (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
   (B) THE COMPTROLLER AND THE CORPORATION MAY ESTABLISH  A  NOMINAL  FEE
 FOR SUCH APPLICATION.
   3.  ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS TO
 THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
   4. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
   5. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE  BALANCE  FROM  AN
 ACCOUNT  AS  AUTHORIZED  UNDER  RULES  GOVERNING THE PROGRAM. SUCH RULES
 SHALL INCLUDE PROVISIONS THAT WILL GENERALLY ENABLE THE DETERMINATION AS
 TO WHETHER A WITHDRAWAL IS A  NONQUALIFIED  WITHDRAWAL  OR  A  QUALIFIED
 WITHDRAWAL.
   6.  (A)  AN  ACCOUNT OWNER MAY CHANGE THE DESIGNATED BENEFICIARY OF AN
 ACCOUNT IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE  MEMORANDUM  OF
 UNDERSTATING  PURSUANT  TO  THE  PROVISIONS  OF  SECTION  TWELVE HUNDRED
 FIFTY-THREE OF THIS ARTICLE.
   (B) AN ACCOUNT OWNER MAY TRANSFER ALL OR A PORTION OF  AN  ACCOUNT  TO
 ANOTHER FIRST HOME SAVINGS ACCOUNT.
   (C)  CHANGES  IN  DESIGNATED  BENEFICIARIES  AND  TRANSFERS UNDER THIS
 SUBDIVISION SHALL NOT BE PERMITTED TO THE EXTENT THAT THEY  WOULD  CAUSE
 ALL  ACCOUNTS FOR THE SAME BENEFICIARY TO EXCEED THE PERMITTED AGGREGATE
 MAXIMUM ACCOUNT BALANCE.
   7. THE PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR  EACH  DESIGNATED
 BENEFICIARY.
   8.  NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF ANY ACCOUNT SHALL BE
 PERMITTED TO DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR
 THE EARNINGS THEREON MORE THAN TWO TIMES IN ANY CALENDAR YEAR.
   9. NEITHER AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY  MAY  USE  AN
 INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
 IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
   10.  THE  COMPTROLLER SHALL PROMULGATE RULES OR REGULATIONS TO PREVENT
 CONTRIBUTIONS ON BEHALF OF A DESIGNATED  BENEFICIARY  IN  EXCESS  OF  AN
 AMOUNT  THAT  WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE FOR ALL ACCOUNTS
 FOR A DESIGNATED BENEFICIARY TO EXCEED A  MAXIMUM  ACCOUNT  BALANCE,  AS
 ESTABLISHED FROM TIME TO TIME BY THE COMPTROLLER.
   11.  CONTRIBUTIONS TO A FIRST HOME SAVINGS ACCOUNT SHALL BE LIMITED TO
 ONE HUNDRED THOUSAND DOLLARS PER ACCOUNT. THIS  AMOUNT  SHALL  NOT  TAKE
 INTO CONSIDERATION ANY GAIN OR LOSS TO THE PRINCIPAL INVESTMENT INTO THE
 ACCOUNT.

 S. 4058--A                          7

   12.  IN THE EVENT THAT AN INDIVIDUAL MAKES A "NONQUALIFIED WITHDRAWAL"
 OF MONIES FROM THE FIRST HOME SAVINGS ACCOUNT SUCH INDIVIDUAL SHALL HAVE
 THE ENTIRE ACCOUNT TAXED, INCLUDING  ANY  INTEREST,  AS  THOUGH  IT  WAS
 INCOME  AT  THE  ACCOUNT  OWNER'S  FEDERAL TAX RATE IN THE TAX YEARS THE
 MONIES WERE WITHDRAWN, AND INCUR AN ADDITIONAL TEN PERCENT STATE PENALTY
 ON  THE  AMOUNT  OF  EARNINGS. IN THE EVENT ACCOUNT OWNERS OR DESIGNATED
 BENEFICIARY DOES NOT USE THE QUALIFIED RESIDENTIAL HOUSING AS A  PRIMARY
 RESIDENCE  FOR A PERIOD OF NOT LESS THAN TWO YEARS AFTER THE PURCHASE OF
 SUCH HOUSING, THE ACCOUNT OWNER SHALL HAVE  THE  ENTIRE  ACCOUNT  TAXED,
 INCLUDING  ANY INTEREST, AS THOUGH IT WAS ORDINARY INCOME AT THE ACCOUNT
 OWNER'S FEDERAL TAX RATE IN THE TAX YEARS THE MONIES WERE WITHDRAWN  AND
 INCUR AN ADDITIONAL TEN PERCENT STATE PENALTY ON THE AMOUNT OF EARNINGS.
 FOR  PURPOSES  OF  THIS  ARTICLE, THE TWO YEAR PERIOD SHALL BEGIN AT THE
 TIME TITLE IS TRANSFERRED TO THE FIRST  TIME  HOME  BUYER.  THE  PENALTY
 SHALL  BE IN ADDITION TO ANY TAXES DUE PURSUANT TO A NON-QUALIFIED WITH-
 DRAWAL FROM A FIRST HOME SAVINGS ACCOUNT.
   13. PENALTIES MAY BE WAIVED BY THE COMMISSIONER IF THE INDIVIDUAL  CAN
 SHOW  PROOF  THAT  THE  REASON  THE INDIVIDUAL DID NOT USE THE QUALIFIED
 RESIDENTIAL HOUSING AS A PRIMARY RESIDENCE FOR A PERIOD OF TWO YEARS  OR
 MORE AFTER THE PURCHASE OR CONSTRUCTION WAS DUE TO EITHER:
   (A)  AN  EMPLOYMENT  RELOCATION  OUTSIDE THE STATE AND SUCH RELOCATION
 REQUIRED THE INDIVIDUAL TO BECOME A RESIDENT OF ANOTHER STATE;
   (B) AN UNFORESEEABLE EMERGENCY;
   (C) AN ABSENCE DUE TO QUALIFYING MILITARY SERVICE; OR
   (D) DEATH.
   FOR PURPOSES OF THIS SUBDIVISION, AN "UNFORESEEABLE  EMERGENCY"  SHALL
 MEAN  A  SEVERE  FINANCIAL  HARDSHIP RESULTING FROM ILLNESS, ACCIDENT OR
 PROPERTY LOSS TO THE ACCOUNT OWNER, OR HIS OR HER  DEPENDENTS  RESULTING
 IN CIRCUMSTANCES BEYOND THEIR CONTROL. THE CIRCUMSTANCES THAT CONSTITUTE
 AN  UNFORESEEABLE  FINANCIAL  EMERGENCY WILL DEPEND ON THE FACTS OF EACH
 CASE, HOWEVER, WITHDRAWAL OF ACCOUNT FUNDS  MAY  NOT  BE  MADE,  WITHOUT
 PENALTY,  TO  THE  EXTENT  THAT  SUCH  HARDSHIP IS OR MAY BE RELIEVED BY
 EITHER:
   (I) REIMBURSEMENT OR COMPENSATION BY INSURANCE OR OTHERWISE; OR
   (II) LIQUIDATION OF THE INDIVIDUAL'S ASSETS TO THE EXTENT  THE  LIQUI-
 DATION OF SUCH ASSETS WOULD NOT ITSELF CAUSE SEVERE FINANCIAL HARDSHIP.
   14.  THE  COMMISSIONER  AND THE COMPTROLLER ARE DIRECTED TO PROMULGATE
 ALL RULES AND REGULATIONS NECESSARY TO IMPLEMENT THE PROVISIONS OF  THIS
 SUBSECTION  AND ARE HEREBY DIRECTED TO ESTABLISH, SUPERVISE AND REGULATE
 FIRST HOME SAVINGS ACCOUNTS AUTHORIZED TO BE CREATED BY THIS SECTION.
   15. (A) IF THERE IS ANY DISTRIBUTION FROM A FIRST HOME SAVINGS ACCOUNT
 TO ANY INDIVIDUAL OR FOR THE BENEFIT OF ANY INDIVIDUAL DURING A CALENDAR
 YEAR, SUCH DISTRIBUTION  SHALL  BE  REPORTED  TO  THE  INTERNAL  REVENUE
 SERVICE  AND  THE  ACCOUNT  OWNER,  THE  DESIGNATED  BENEFICIARY, OR THE
 DISTRIBUTEE TO THE EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
   (B) STATEMENTS SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT  LEAST  ONCE
 EACH  YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE MONTH PERIOD TO
 WHICH THEY RELATE. THE STATEMENT SHALL IDENTIFY THE  CONTRIBUTIONS  MADE
 DURING  A PRECEDING TWELVE MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE TO
 THE ACCOUNT THROUGH THE END OF THE PERIOD, THE VALUE OF THE  ACCOUNT  AT
 THE  END  OF  SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH PERIOD AND ANY
 OTHER INFORMATION THAT THE COMPTROLLER SHALL REQUIRE TO BE  REPORTED  TO
 THE ACCOUNT OWNER.
   (C)  STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE PREPARED
 AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAWS.

 S. 4058--A                          8
 
   16. AN ANNUAL FEE MAY BE IMPOSED UPON THE ACCOUNT OWNER FOR THE  MAIN-
 TENANCE OF THE ACCOUNT.
   17. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
 EACH ACCOUNT OWNER OF A FIRST HOME SAVINGS ACCOUNT:
   (A)  THE  TERMS  AND  CONDITIONS FOR ESTABLISHING A FIRST HOME SAVINGS
 ACCOUNT;
   (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
   (C) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE FIRST HOME  SAVINGS
 AGREEMENT;
   (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
 UNDER THE FIRST HOME SAVINGS AGREEMENT;
   (E)  THE  TERMS  AND  CONDITIONS  UNDER  WHICH  MONEY MAY BE WHOLLY OR
 PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
 REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
   (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
 DISTRIBUTIONS FROM ACCOUNTS; AND
   (G) ALL OTHER RIGHTS AND OBLIGATIONS PURSUANT TO  FIRST  HOME  SAVINGS
 AGREEMENTS,  AND  ANY  OTHER  TERMS,  CONDITIONS,  AND PROVISIONS DEEMED
 NECESSARY AND APPROPRIATE BY THE TERMS OF THE MEMORANDUM OF  UNDERSTAND-
 ING  ENTERED INTO PURSUANT TO SECTION TWELVE HUNDRED FIFTY-THREE OF THIS
 ARTICLE.
   18. FIRST HOME SAVINGS AGREEMENTS SHALL BE SUBJECT  TO  SECTION  FOUR-
 TEEN-C OF THE BANKING LAW AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMUL-
 GATED THEREUNDER.
   19.  NOTHING  IN  THIS  ARTICLE OR IN ANY FIRST HOME SAVINGS AGREEMENT
 ENTERED INTO PURSUANT TO THIS ARTICLE SHALL BE CONSTRUED AS A  GUARANTEE
 BY THE STATE THAT THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY WILL QUAL-
 IFY FOR THE PURCHASE OF A HOME.
   20.  TO ESTABLISH THAT AN ACCOUNT OWNER OR DESIGNATED BENEFICIARY IS A
 FIRST TIME HOME BUYER, THE INDIVIDUAL SHALL COMPLETE A FORM  PROMULGATED
 BY THE COMPTROLLER CERTIFYING, UNDER THE PENALTIES OF PERJURY, THAT SUCH
 INDIVIDUAL IS A FIRST TIME HOME BUYER.
   21. AN INDIVIDUAL MUST NOT INTEND TO USE ANY PORTION OF THE REAL PROP-
 ERTY  PURCHASED USING THE FIRST HOME SAVINGS ACCOUNT FUNDS IN A TRADE OR
 BUSINESS, OR AS A VACATION HOME OR AS AN INVESTMENT, EXCEPT AS AN  OWNER
 OCCUPIED MULTIPLE DWELLING WITH NO MORE THAN TWO RENTAL UNITS.
   22. MONIES WITHDRAWN FROM FIRST HOME SAVINGS ACCOUNTS AND ANY INTEREST
 WHICH  HAS  ACCRUED  SHALL  NOT  BE CONSIDERED AS ORDINARY INCOME TO THE
 ACCOUNT OWNER FOR STATE PERSONAL INCOME TAXATION PURPOSES,  SO  LONG  AS
 THE  MONIES  ARE APPLIED FOR THE PURCHASE OR CONSTRUCTION OF A QUALIFIED
 FIRST HOME PURCHASE BY THE ACCOUNT OWNER OR  DESIGNATED  BENEFICIARY  OF
 THE ACCOUNT.
   § 1256. PROGRAM LIMITATIONS; FIRST HOME SAVINGS ACCOUNT. 1. NOTHING IN
 THIS ARTICLE SHALL BE CONSTRUED TO:
   (A)  GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST WITH
 RESPECT TO AN ACCOUNT UNLESS THE DESIGNATED BENEFICIARY IS  THE  ACCOUNT
 OWNER;
   (B) GUARANTEE THAT THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY WILL BE
 FINANCIALLY QUALIFIED TO PURCHASE A HOME;
   (C)  CREATE STATE RESIDENCY FOR AN INDIVIDUAL MERELY BECAUSE THE INDI-
 VIDUAL IS A DESIGNATED BENEFICIARY; OR
   (D) GUARANTEE THAT AMOUNTS SAVED  PURSUANT  TO  THE  PROGRAM  WILL  BE
 SUFFICIENT  TO  COVER  THE DOWN PAYMENT OR CLOSING COSTS PURSUANT TO THE
 PURCHASE OF A QUALIFIED FIRST HOME.
   2. (A) NOTHING IN THIS ARTICLE SHALL CREATE OR BE CONSTRUED TO  CREATE
 ANY  OBLIGATION  OF THE COMPTROLLER, THE STATE, OR ANY AGENCY OR INSTRU-

 S. 4058--A                          9
 
 MENTALITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF THE ACCOUNT OWNER
 OR DESIGNATED BENEFICIARY WITH RESPECT TO:
   (I) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
   (II) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT.
   (B)  THE  COMPTROLLER  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 GUARANTEED BY THE STATE.
   § 2. Subsection (b) of section 612 of the tax law is amended by adding
 a new paragraph 42 to read as follows:
   (42) (A) EXCESS DISTRIBUTIONS RECEIVED DURING THE TAXABLE  YEAR  BY  A
 DISTRIBUTEE  OF  A  FIRST HOME SAVINGS ACCOUNT ESTABLISHED UNDER THE NEW
 YORK STATE FIRST HOME SAVINGS PROGRAM PROVIDED FOR UNDER  ARTICLE  TWEN-
 TY-EIGHT  OF  THE PRIVATE HOUSING FINANCE LAW, TO THE EXTENT SUCH EXCESS
 DISTRIBUTIONS ARE DEEMED ATTRIBUTABLE TO  THE  DEDUCTIBLE  CONTRIBUTIONS
 UNDER PARAGRAPH FORTY-TWO OF SUBSECTION (C) OF THIS SECTION.
   (B)  (I) THE TERM "EXCESS DISTRIBUTIONS" MEANS DISTRIBUTIONS WHICH ARE
 NOT:
   (I) QUALIFIED WITHDRAWALS WITHIN THE MEANING  OF  SUBDIVISION  TEN  OF
 SECTION TWELVE HUNDRED FIFTY-TWO OF THE PRIVATE HOUSING FINANCE LAW;
   (II)  WITHDRAWALS  MADE  AS A RESULT OF THE DEATH OR DISABILITY OF THE
 DESIGNATED BENEFICIARY WITHIN  THE  MEANING  OF  SUBDIVISION  ELEVEN  OF
 SECTION TWELVE HUNDRED FIFTY-TWO OF SUCH LAW; OR
   (III)  TRANSFERS  DESCRIBED  IN  PARAGRAPH  (B)  OF SUBDIVISION SIX OF
 SECTION TWELVE HUNDRED FIFTY-FIVE OF SUCH LAW.
   (II) EXCESS DISTRIBUTIONS SHALL BE DEEMED ATTRIBUTABLE  TO  DEDUCTIBLE
 CONTRIBUTIONS  TO THE EXTENT THE AMOUNT OF ANY SUCH EXCESS DISTRIBUTION,
 WHEN ADDED TO  ALL  PREVIOUS  EXCESS  DISTRIBUTIONS  FROM  THE  ACCOUNT,
 EXCEEDS THE AGGREGATE OF ALL NONDEDUCTIBLE CONTRIBUTIONS TO THE ACCOUNT.
   § 3. Subsection (c) of section 612 of the tax law is amended by adding
 two new paragraphs 42 and 43 to read as follows:
   (42) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
 A  FIRST HOME SAVINGS ACCOUNT ESTABLISHED UNDER THE NEW YORK STATE FIRST
 HOME SAVINGS PROGRAM PROVIDED FOR  UNDER  ARTICLE  TWENTY-EIGHT  OF  THE
 PRIVATE  HOUSING  FINANCE  LAW, TO THE EXTENT NOT DEDUCTIBLE OR ELIGIBLE
 FOR CREDIT FOR FEDERAL  INCOME  TAX  PURPOSES,  PROVIDED,  HOWEVER,  THE
 EXCLUSION  PROVIDED FOR IN THIS PARAGRAPH SHALL NOT EXCEED FIVE THOUSAND
 DOLLARS FOR AN INDIVIDUAL HEAD OF HOUSEHOLD, AND FOR MARRIED COUPLES WHO
 FILE JOINT TAX RETURNS, SHALL NOT EXCEED TEN THOUSAND DOLLARS; PROVIDED,
 FURTHER THAT SUCH EXCLUSION SHALL BE AVAILABLE ONLY TO THE ACCOUNT OWNER
 AND NOT TO ANY OTHER PERSON.
   (43) DISTRIBUTIONS FROM A FIRST HOME SAVINGS ACCOUNT ESTABLISHED UNDER
 THE NEW YORK STATE FIRST HOME SAVINGS PROGRAM PROVIDED FOR UNDER ARTICLE
 TWENTY-EIGHT OF THE PRIVATE HOUSING FINANCE LAW, TO THE EXTENT  INCLUDI-
 BLE IN GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES.
   § 4. This act shall take effect on the one hundred eightieth day after
 it  shall have become a law, and shall apply to taxable years commencing
 on or after the first of January next succeeding the date  on  which  it
 shall  have  become  law; provided, however, that effective immediately,
 the commissioner of taxation and finance and the comptroller are author-
 ized and directed to promulgate any rules or  regulations  necessary  to
 implement  the provisions of this act on its effective date on or before
 such date.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4058--B
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 2, 2017
                                ___________
 
 Introduced  by  Sens.  LITTLE, ADDABBO, AKSHAR, AVELLA, BONACIC, BROOKS,
   COMRIE, CROCI, DeFRANCISCO, DILAN, FUNKE, GALLIVAN, GIANARIS,  GRIFFO,
   HAMILTON, HANNON, HELMING, KAMINSKY, KENNEDY, LATIMER, MURPHY, O'MARA,
   ORTT, PARKER, PHILLIPS, RANZENHOFER, RITCHIE, ROBACH, SANDERS, SAVINO,
   SEWARD,  VALESKY,  YOUNG  --  read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community  Development  --  reported favorably from said committee and
   committed to the Committee on Finance --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee --  committee  discharged,  bill  amended,  ordered  reprinted  as
   amended and recommitted to said committee
 
 AN  ACT  to amend the private housing finance law, in relation to estab-
   lishing the New York state first home savings program,  which  author-
   izes  first time home buyers to establish savings accounts to purchase
   a home; and to amend the  tax  law,  in  relation  to  establishing  a
   personal income tax deduction for deposits into such accounts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The private housing finance law is amended by adding a  new
 article 28 to read as follows:
                              ARTICLE XXVIII
                         NEW YORK STATE FIRST HOME
                              SAVINGS PROGRAM
 SECTION 1250. PROGRAM ESTABLISHED.
         1251. PURPOSES.
         1252. DEFINITIONS.
         1253. FUNCTIONS OF THE COMPTROLLER.
         1254. POWERS OF THE COMPTROLLER.
         1255. PROGRAM REQUIREMENTS; FIRST HOME SAVINGS ACCOUNT.
         1256. PROGRAM LIMITATIONS; FIRST HOME SAVINGS ACCOUNT.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00765-11-7
              

 S. 4058--B                          2
 
   §  1250. PROGRAM ESTABLISHED. THERE IS HEREBY ESTABLISHED A FIRST HOME
 SAVINGS PROGRAM AND SUCH PROGRAM SHALL BE KNOWN AND MAY BE CITED AS  THE
 "NEW YORK STATE FIRST HOME SAVINGS PROGRAM".
   §  1251.  PURPOSES.  THE PURPOSES OF THE PROGRAM SHALL BE TO AUTHORIZE
 THE ESTABLISHMENT OF FIRST HOME SAVINGS ACCOUNTS AND TO  PROVIDE  GUIDE-
 LINES FOR THE MAINTENANCE OF SUCH ACCOUNTS TO:
   1.  ENABLE  RESIDENTS  OF THIS STATE TO BENEFIT FROM THE TAX INCENTIVE
 PROVIDED FOR QUALIFIED STATE FIRST HOME SAVINGS ACCOUNTS  UNDER  SECTION
 SIX HUNDRED TWELVE OF THE TAX LAW; AND
   2.  INCENTIVIZE  RESIDENTS  TO  SAVE  FOR THE PURCHASE OF A FIRST HOME
 WITHIN THE STATE.
   § 1252. DEFINITIONS. AS USED IN  THIS  ARTICLE,  THE  FOLLOWING  TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "ACCOUNT" OR "FIRST HOME SAVINGS ACCOUNT" SHALL MEAN AN INDIVIDUAL
 SAVINGS ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE  PROVISIONS  OF  THIS
 ARTICLE  FOR  THE  EXCLUSIVE  BENEFIT OF THE ACCOUNT OWNER OR DESIGNATED
 BENEFICIARY THAT IS THE FIRST TIME BUYER OF A HOME, TOWNHOME,  CONDOMIN-
 IUM OR UNIT IN A COOPERATIVE HOUSING CORPORATION.
   2.  "ACCOUNT OWNER" SHALL MEAN A TAXPAYER WHO ENTERS INTO A FIRST HOME
 SAVINGS AGREEMENT PURSUANT TO THE PROVISIONS OF THIS ARTICLE,  INCLUDING
 A  PERSON  WHO  ENTERS INTO SUCH AN AGREEMENT AS A FIDUCIARY OR AGENT ON
 BEHALF OF A TRUST, ESTATE, PARTNERSHIP, ASSOCIATION, COMPANY  OR  CORPO-
 RATION.
   3.  "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT OR
 ACCOUNTS, THE DESIGNATED INDIVIDUAL OR INDIVIDUALS    WHOSE  FIRST  HOME
 PURCHASE EXPENSES ARE EXPECTED TO BE PAID FROM THE ACCOUNT OR ACCOUNTS.
   4.  "FINANCIAL  ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO
 DO BUSINESS IN THE STATE, AND (A) WHICH IS AN  AUTHORIZED  FIDUCIARY  TO
 ACT  AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS ENTI-
 TLED  "EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT  OF  1974",  AS  SUCH
 PROVISIONS  MAY  BE  AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPANY;
 AND (B)(I) IS LICENSED OR  CHARTERED  BY  THE  DEPARTMENT  OF  FINANCIAL
 SERVICES,  (II)  IS  CHARTERED  BY  AN AGENCY OF THE FEDERAL GOVERNMENT,
 (III) IS SUBJECT TO THE JURISDICTION AND REGULATION  OF  THE  SECURITIES
 AND  EXCHANGE  COMMISSION  OF  THE FEDERAL GOVERNMENT, (IV) 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, (V) OR ANY BANKING ORGANIZATION AS DEFINED IN SUBDIVISION
 ELEVEN OF SECTION TWO OF THE BANKING LAW, NATIONAL BANKING  ASSOCIATION,
 STATE  CHARTERED  CREDIT  UNION,  FEDERAL  MUTUAL  SAVINGS BANK, FEDERAL
 SAVINGS AND LOAN ASSOCIATION OR FEDERAL CREDIT UNION.
   5. "FIRST TIME HOME BUYER" SHALL MEAN AN  INDIVIDUAL  OR  INDIVIDUALS,
 NEITHER  OF  WHOM  HAS OR HAD AN OWNERSHIP INTEREST IN A PRINCIPAL RESI-
 DENCE AT ANY TIME, INCLUDING RESIDENCES OWNED IN THE  UNITED  STATES  OR
 ABROAD.    NO SUCH PERSON SHALL OWN ANY OTHER HOME INCLUDING VACATION OR
 INVESTMENT RESIDENCES, INCLUDING RESIDENCES OWNED IN THE  UNITED  STATES
 OR  ABROAD,  EXCEPT AS OTHERWISE PROVIDED IN THIS SUBDIVISION. IF EITHER
 THE INDIVIDUAL OR INDIVIDUALS ARE NOT FIRST TIME  HOME  BUYERS,  NEITHER
 THE  INDIVIDUAL  OR  INDIVIDUALS  SHALL  BE CONSIDERED A FIRST TIME HOME
 BUYER. IF AN INDIVIDUAL'S ONLY POTENTIALLY DISQUALIFYING PRESENT  OWNER-
 SHIP  INTEREST  IS OWNERSHIP OF A MOBILE OR MANUFACTURED HOME, THE INDI-
 VIDUAL SHALL BE CONSIDERED A FIRST TIME HOME BUYER AND SHALL BE ELIGIBLE
 FOR A FIRST HOME ACCOUNT DEDUCTION. FOR THE PURPOSES OF THIS  ARTICLE  A
 "MOBILE  OR  MANUFACTURED HOME" SHALL MEAN A STRUCTURE THAT IS VALUED AS
 PERSONAL PROPERTY AND NOT REAL PROPERTY. IF, DUE TO HIS OR HER OWNERSHIP

 S. 4058--B                          3
 
 OF A MOBILE OR MANUFACTURED HOME, THE  INDIVIDUAL  HAS  CLAIMED  A  REAL
 ESTATE  TAX OR HOME MORTGAGE DEDUCTION ON HIS OR HER PERSONAL INCOME TAX
 RETURNS, SUCH INDIVIDUAL SHALL NOT BE CONSIDERED A FIRST TIME HOME BUYER
 REGARDLESS  OF  WHETHER  THE  MOBILE OF MANUFACTURED HOME WAS CONSIDERED
 PERSONAL OR REAL PROPERTY.
   6. "OWNERSHIP INTEREST" SHALL MEAN A  FEE  SIMPLE  INTEREST,  A  JOINT
 TENANCY, A TENANCY IN COMMON, A TENANCY BY THE ENTIRETY, THE INTEREST OF
 A  TENANT-SHARE  HOLDER  IN  A  COOPERATIVE,  A  LIFE  ESTATE  OR A LAND
 CONTRACT. INTERESTS WHICH DO NOT CONSTITUTE OWNERSHIP INTERESTS  INCLUDE
 THE  FOLLOWING:  (A) REMAINDER INTERESTS, (B) A LEASE WITH OR WITHOUT AN
 OPTION TO PURCHASE, (C) A MERE EXPECTANCY TO INHERIT AN  INTEREST  IN  A
 RESIDENCE,  (D) THE INTEREST THAT A PURCHASER OF A RESIDENCE ACQUIRES ON
 THE EXECUTION OF A PURCHASE CONTRACT AND (E) AN INTEREST IN REAL  ESTATE
 OTHER THAN A RESIDENCE.
   7. "PROGRAM" SHALL MEAN THE NEW YORK FIRST HOME SAVINGS PROGRAM ESTAB-
 LISHED PURSUANT TO THIS ARTICLE.
   8.  "QUALIFIED FIRST HOME PURCHASE EXPENSES" SHALL MEAN MONIES APPLIED
 FOR THE PURCHASE OR CONSTRUCTION OF A HOUSE, TOWNHOUSE,  CONDOMINIUM  OR
 UNIT IN A COOPERATIVE HOUSING CORPORATION WITHIN THE STATE TO BE USED AS
 A PRIMARY RESIDENCE OF THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY FOR A
 PERIOD OF NOT LESS THAN TWO YEARS AFTER PURCHASE.
   9.  "QUALIFIED  RESIDENTIAL  HOUSING"  SHALL  MEAN A HOUSE, TOWNHOUSE,
 CONDOMINIUM OR UNIT IN A  COOPERATIVE  HOUSING  CORPORATION  WITHIN  THE
 STATE.
   10.  "QUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT TO
 PAY THE QUALIFIED FIRST HOME PURCHASE EXPENSE OF THE  ACCOUNT  OWNER  OR
 DESIGNATED BENEFICIARY OF THE ACCOUNT.
   11.  "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT
 BUT SHALL NOT INCLUDE:
   (A) A QUALIFIED WITHDRAWAL;
   (B) A WITHDRAWAL MADE AS THE RESULT OF DEATH;
   (C) AN UNFORESEEABLE EMERGENCY; OR
   (D) NEED BASED UPON QUALIFYING FOR MILITARY SERVICE IN THE ARMED FORC-
 ES OF THE UNITED STATES AS DETERMINED BY RULES AN REGULATIONS PROMULGAT-
 ED BY THE COMPTROLLER.
   12. "COMPTROLLER" SHALL MEAN THE STATE COMPTROLLER.
   13. "MANAGEMENT CONTRACT" SHALL MEAN  THE  CONTRACT  EXECUTED  BY  THE
 COMPTROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY
 AND MANAGER OF THE PROGRAM.
   14. "FIRST HOME SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE
 COMPTROLLER OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
   15.  "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED BY
 THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
   16.  "COMMISSIONER"  SHALL  MEAN  THE  COMMISSIONER  OF  TAXATION  AND
 FINANCE.
   § 1253. FUNCTIONS OF THE COMPTROLLER.  1. THE COMPTROLLER SHALL IMPLE-
 MENT  THE  PROGRAM  UNDER  THE  TERMS AND CONDITIONS ESTABLISHED BY THIS
 ARTICLE AND A MEMORANDUM OF UNDERSTANDING WITH THE COMMISSIONER RELATING
 TO ANY TERMS OR CONDITIONS NOT OTHERWISE EXPRESSLY PROVIDED FOR IN  THIS
 ARTICLE.
   2. IN FURTHERANCE OF SUCH IMPLEMENTATION THE COMPTROLLER SHALL:
   (A)  DEVELOP AND IMPLEMENT THE PROGRAM IN A MANNER CONSISTENT WITH THE
 PROVISIONS OF THIS ARTICLE THROUGH RULES AND REGULATIONS ESTABLISHED  IN
 ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
   (B) ENGAGE THE SERVICES OF CONSULTANTS ON A CONTRACT BASIS FOR RENDER-
 ING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;

 S. 4058--B                          4
 
   (C)  SEEK RULINGS AND OTHER GUIDANCE FROM THE UNITED STATES DEPARTMENT
 OF TREASURY AND THE INTERNAL REVENUE SERVICE RELATING TO THE PROGRAM;
   (D)  MAKE  CHANGES TO THE PROGRAM REQUIRED FOR THE PARTICIPANTS IN THE
 PROGRAM TO OBTAIN THE STATE INCOME TAX BENEFITS OR TREATMENT PROVIDED BY
 THIS ARTICLE;
   (E) CHARGE, IMPOSE AND COLLECT ADMINISTRATIVE FEES AND SERVICE CHARGES
 IN CONNECTION WITH ANY AGREEMENT, CONTRACT OR  TRANSACTION  RELATING  TO
 THE PROGRAM;
   (F) DEVELOP MARKETING PLANS AND PROMOTION MATERIALS;
   (G)  ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS BE
 DISPERSED;
   (H) ESTABLISH THE METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY  FOR
 ADMINISTRATIVE COSTS; AND
   (I)  DO  ALL  THINGS NECESSARY AND PROPER TO CARRY OUT THE PURPOSES OF
 THIS ARTICLE.
   § 1254. POWERS OF THE COMPTROLLER. 1. THE  COMPTROLLER  MAY  IMPLEMENT
 THE  PROGRAM THROUGH USE OF FINANCIAL ORGANIZATIONS AS ACCOUNT DEPOSITO-
 RIES AND MANAGERS. UNDER THE PROGRAM, AN  ACCOUNT  OWNER  MAY  ESTABLISH
 ACCOUNTS DIRECTLY WITH AN ACCOUNT DEPOSITORY.
   2.  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:
   (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
   (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
   (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
 OF RESIDENTIAL HOUSING;
   (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
 AND REPORTING REQUIREMENTS;
   (E)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
 THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
   (F) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO  PERSONS  FOR  OPENING
 ACCOUNTS;
   (G)  THE  MINIMUM  INITIAL  DEPOSIT AND MINIMUM CONTRIBUTIONS THAT THE
 FINANCIAL ORGANIZATION WILL REQUIRE;
   (H) THE ABILITY OF BANKING ORGANIZATIONS TO  ACCEPT  ELECTRONIC  WITH-
 DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
   (I)  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.
   3. 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.
   4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
 THE PROGRAM.
   5. A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS  REQUIRING
 THE FINANCIAL ORGANIZATION TO:
   (A)  TAKE  ANY  ACTION REQUIRED TO KEEP THE PROGRAM IN COMPLIANCE WITH
 REQUIREMENTS OF SECTION TWELVE HUNDRED FIFTY-FIVE OF  THIS  ARTICLE  AND
 ANY ACTIONS NOT CONTRARY TO ITS CONTRACT TO MANAGE THE PROGRAM TO QUALI-
 FY  AS  A  "FIRST  HOME  SAVINGS  ACCOUNT"  UNDER PARAGRAPH FORTY-TWO OF
 SUBSECTION (C) OF SECTION SIX HUNDRED TWELVE OF THE TAX LAW;

 S. 4058--B                          5
 
   (B) 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  SECTION
 TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE;
   (C)  COMPILE AND TOTAL INFORMATION CONTAINED IN STATEMENTS REQUIRED TO
 BE PREPARED UNDER SECTION TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE  AND
 PROVIDE SUCH COMPILATIONS TO THE COMPTROLLER;
   (D) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
 WITH  SUCH  INFORMATION  NECESSARY  TO DETERMINE COMPLIANCE WITH SECTION
 TWELVE HUNDRED FIFTY-FIVE OF THIS ARTICLE;
   (E) 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;
   (F) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
   (G)  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;
   (H) 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
   (I)  ENSURE THAT ANY DESCRIPTION OF THE PROGRAM, WHETHER IN WRITING OR
 THROUGH THE USE OF ANY MEDIA, IS CONSISTENT WITH THE MARKETING  PLAN  AS
 DEVELOPED  PURSUANT  TO  THE PROVISIONS OF SECTION TWELVE HUNDRED FIFTY-
 THREE OF THIS ARTICLE.
   6. 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.
   7.  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.
   8.  (A)  IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER
 OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
   (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
 AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
   (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
   (III) NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL  ORGANIZATION;
 AND
   (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
 ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
   (B)  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.

 S. 4058--B                          6
 
   9. THE COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECESSARY
 AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
   §  1255.  PROGRAM  REQUIREMENTS;  FIRST HOME SAVINGS ACCOUNT. 1. FIRST
 HOME SAVINGS ACCOUNTS ESTABLISHED PURSUANT TO  THE  PROVISIONS  OF  THIS
 ARTICLE SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION.
   2.  A  FIRST  HOME  SAVINGS  ACCOUNT  MAY  BE OPENED BY ANY PERSON WHO
 DESIRES TO SAVE MONEY FOR  THE  PAYMENT  OF  THE  QUALIFIED  FIRST  HOME
 PURCHASE  EXPENSES  OF  THE  ACCOUNT OWNER OR DESIGNATED BENEFICIARY. AN
 ACCOUNT OWNER MAY DESIGNATE ANOTHER PERSON AS  SUCCESSOR  OWNER  OF  THE
 ACCOUNT  IN  THE  EVENT OF THE DEATH OF THE ORIGINAL ACCOUNT OWNER. SUCH
 PERSON WHO OPENS AN ACCOUNT OR ANY SUCCESSOR OWNER SHALL  BE  CONSIDERED
 THE ACCOUNT OWNER.
   (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
 THE PROGRAM AND CONTAIN THE FOLLOWING:
   (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
 CATION NUMBER OF THE ACCOUNT OWNER;
   (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
   (III)  THE NAME, ADDRESS, AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
 BENEFICIARY; AND
   (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
   (B) THE COMPTROLLER AND THE CORPORATION MAY ESTABLISH  A  NOMINAL  FEE
 FOR SUCH APPLICATION.
   3.  ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS TO
 THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
   4. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
   5. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE  BALANCE  FROM  AN
 ACCOUNT  AS  AUTHORIZED  UNDER  RULES  GOVERNING THE PROGRAM. SUCH RULES
 SHALL INCLUDE PROVISIONS THAT WILL GENERALLY ENABLE THE DETERMINATION AS
 TO WHETHER A WITHDRAWAL IS A  NONQUALIFIED  WITHDRAWAL  OR  A  QUALIFIED
 WITHDRAWAL.
   6.  (A)  AN  ACCOUNT OWNER MAY CHANGE THE DESIGNATED BENEFICIARY OF AN
 ACCOUNT IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE  MEMORANDUM  OF
 UNDERSTATING  PURSUANT  TO  THE  PROVISIONS  OF  SECTION  TWELVE HUNDRED
 FIFTY-THREE OF THIS ARTICLE.
   (B) AN ACCOUNT OWNER MAY TRANSFER ALL OR A PORTION OF  AN  ACCOUNT  TO
 ANOTHER FIRST HOME SAVINGS ACCOUNT.
   (C)  CHANGES  IN  DESIGNATED  BENEFICIARIES  AND  TRANSFERS UNDER THIS
 SUBDIVISION SHALL NOT BE PERMITTED TO THE EXTENT THAT THEY  WOULD  CAUSE
 ALL  ACCOUNTS FOR THE SAME BENEFICIARY TO EXCEED THE PERMITTED AGGREGATE
 MAXIMUM ACCOUNT BALANCE.
   7. THE PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR  EACH  DESIGNATED
 BENEFICIARY.
   8.  NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF ANY ACCOUNT SHALL BE
 PERMITTED TO DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR
 THE EARNINGS THEREON MORE THAN TWO TIMES IN ANY CALENDAR YEAR.
   9. NEITHER AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY  MAY  USE  AN
 INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
 IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
   10.  THE  COMPTROLLER SHALL PROMULGATE RULES OR REGULATIONS TO PREVENT
 CONTRIBUTIONS ON BEHALF OF A DESIGNATED  BENEFICIARY  IN  EXCESS  OF  AN
 AMOUNT  THAT  WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE FOR ALL ACCOUNTS
 FOR A DESIGNATED BENEFICIARY TO EXCEED A  MAXIMUM  ACCOUNT  BALANCE,  AS
 ESTABLISHED FROM TIME TO TIME BY THE COMPTROLLER.
   11.  CONTRIBUTIONS TO A FIRST HOME SAVINGS ACCOUNT SHALL BE LIMITED TO
 ONE HUNDRED THOUSAND DOLLARS PER ACCOUNT. THIS  AMOUNT  SHALL  NOT  TAKE

 S. 4058--B                          7
 
 INTO CONSIDERATION ANY GAIN OR LOSS TO THE PRINCIPAL INVESTMENT INTO THE
 ACCOUNT.
   12.  IN THE EVENT THAT AN INDIVIDUAL MAKES A "NONQUALIFIED WITHDRAWAL"
 OF MONIES FROM THE FIRST HOME SAVINGS ACCOUNT SUCH INDIVIDUAL SHALL HAVE
 THE ENTIRE ACCOUNT TAXED, INCLUDING  ANY  INTEREST,  AS  THOUGH  IT  WAS
 INCOME  AT  THE  ACCOUNT  OWNER'S  FEDERAL TAX RATE IN THE TAX YEARS THE
 MONIES WERE WITHDRAWN, AND INCUR AN ADDITIONAL TEN PERCENT STATE PENALTY
 ON THE AMOUNT OF EARNINGS. IN THE EVENT  ACCOUNT  OWNERS  OR  DESIGNATED
 BENEFICIARY  DOES NOT USE THE QUALIFIED RESIDENTIAL HOUSING AS A PRIMARY
 RESIDENCE FOR A PERIOD OF NOT LESS THAN TWO YEARS AFTER THE PURCHASE  OF
 SUCH  HOUSING,  THE  ACCOUNT  OWNER SHALL HAVE THE ENTIRE ACCOUNT TAXED,
 INCLUDING ANY INTEREST, AS THOUGH IT WAS ORDINARY INCOME AT THE  ACCOUNT
 OWNER'S  FEDERAL TAX RATE IN THE TAX YEARS THE MONIES WERE WITHDRAWN AND
 INCUR AN ADDITIONAL TEN PERCENT STATE PENALTY ON THE AMOUNT OF EARNINGS.
 FOR PURPOSES OF THIS ARTICLE, THE TWO YEAR PERIOD  SHALL  BEGIN  AT  THE
 TIME  TITLE  IS  TRANSFERRED  TO  THE FIRST TIME HOME BUYER. THE PENALTY
 SHALL BE IN ADDITION TO ANY TAXES DUE PURSUANT TO A NON-QUALIFIED  WITH-
 DRAWAL FROM A FIRST HOME SAVINGS ACCOUNT.
   13.  PENALTIES MAY BE WAIVED BY THE COMMISSIONER IF THE INDIVIDUAL CAN
 SHOW PROOF THAT THE REASON THE INDIVIDUAL  DID  NOT  USE  THE  QUALIFIED
 RESIDENTIAL  HOUSING AS A PRIMARY RESIDENCE FOR A PERIOD OF TWO YEARS OR
 MORE AFTER THE PURCHASE OR CONSTRUCTION WAS DUE TO EITHER:
   (A) AN EMPLOYMENT RELOCATION OUTSIDE THE  STATE  AND  SUCH  RELOCATION
 REQUIRED THE INDIVIDUAL TO BECOME A RESIDENT OF ANOTHER STATE;
   (B) AN UNFORESEEABLE EMERGENCY;
   (C) AN ABSENCE DUE TO QUALIFYING MILITARY SERVICE; OR
   (D) DEATH.
   FOR  PURPOSES  OF THIS SUBDIVISION, AN "UNFORESEEABLE EMERGENCY" SHALL
 MEAN A SEVERE FINANCIAL HARDSHIP RESULTING  FROM  ILLNESS,  ACCIDENT  OR
 PROPERTY  LOSS  TO THE ACCOUNT OWNER, OR HIS OR HER DEPENDENTS RESULTING
 IN CIRCUMSTANCES BEYOND THEIR CONTROL. THE CIRCUMSTANCES THAT CONSTITUTE
 AN UNFORESEEABLE FINANCIAL EMERGENCY WILL DEPEND ON THE  FACTS  OF  EACH
 CASE,  HOWEVER,  WITHDRAWAL  OF  ACCOUNT  FUNDS MAY NOT BE MADE, WITHOUT
 PENALTY, TO THE EXTENT THAT SUCH HARDSHIP  IS  OR  MAY  BE  RELIEVED  BY
 EITHER:
   (I) REIMBURSEMENT OR COMPENSATION BY INSURANCE OR OTHERWISE; OR
   (II)  LIQUIDATION  OF THE INDIVIDUAL'S ASSETS TO THE EXTENT THE LIQUI-
 DATION OF SUCH ASSETS WOULD NOT ITSELF CAUSE SEVERE FINANCIAL HARDSHIP.
   14. THE COMMISSIONER AND THE COMPTROLLER ARE  DIRECTED  TO  PROMULGATE
 ALL  RULES AND REGULATIONS NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS
 SUBSECTION AND ARE HEREBY DIRECTED TO ESTABLISH, SUPERVISE AND  REGULATE
 FIRST HOME SAVINGS ACCOUNTS AUTHORIZED TO BE CREATED BY THIS SECTION.
   15. (A) IF THERE IS ANY DISTRIBUTION FROM A FIRST HOME SAVINGS ACCOUNT
 TO ANY INDIVIDUAL OR FOR THE BENEFIT OF ANY INDIVIDUAL DURING A CALENDAR
 YEAR,  SUCH  DISTRIBUTION  SHALL  BE  REPORTED  TO  THE INTERNAL REVENUE
 SERVICE AND THE  ACCOUNT  OWNER,  THE  DESIGNATED  BENEFICIARY,  OR  THE
 DISTRIBUTEE TO THE EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
   (B)  STATEMENTS  SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT LEAST ONCE
 EACH YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE MONTH PERIOD  TO
 WHICH  THEY  RELATE. THE STATEMENT SHALL IDENTIFY THE CONTRIBUTIONS MADE
 DURING A PRECEDING TWELVE MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE  TO
 THE  ACCOUNT  THROUGH THE END OF THE PERIOD, THE VALUE OF THE ACCOUNT AT
 THE END OF SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH  PERIOD  AND  ANY
 OTHER  INFORMATION  THAT THE COMPTROLLER SHALL REQUIRE TO BE REPORTED TO
 THE ACCOUNT OWNER.

 S. 4058--B                          8
 
   (C) STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE  PREPARED
 AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAWS.
   16.  AN ANNUAL FEE MAY BE IMPOSED UPON THE ACCOUNT OWNER FOR THE MAIN-
 TENANCE OF THE ACCOUNT.
   17. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
 EACH ACCOUNT OWNER OF A FIRST HOME SAVINGS ACCOUNT:
   (A) THE TERMS AND CONDITIONS FOR ESTABLISHING  A  FIRST  HOME  SAVINGS
 ACCOUNT;
   (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
   (C)  THE PERSON OR ENTITY ENTITLED TO TERMINATE THE FIRST HOME SAVINGS
 AGREEMENT;
   (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
 UNDER THE FIRST HOME SAVINGS AGREEMENT;
   (E) THE TERMS AND CONDITIONS  UNDER  WHICH  MONEY  MAY  BE  WHOLLY  OR
 PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
 REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
   (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
 DISTRIBUTIONS FROM ACCOUNTS; AND
   (G)  ALL  OTHER  RIGHTS AND OBLIGATIONS PURSUANT TO FIRST HOME SAVINGS
 AGREEMENTS, AND ANY  OTHER  TERMS,  CONDITIONS,  AND  PROVISIONS  DEEMED
 NECESSARY  AND APPROPRIATE BY THE TERMS OF THE MEMORANDUM OF UNDERSTAND-
 ING ENTERED INTO PURSUANT TO SECTION TWELVE HUNDRED FIFTY-THREE OF  THIS
 ARTICLE.
   18.  FIRST  HOME  SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION FOUR-
 TEEN-C OF THE BANKING LAW AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMUL-
 GATED THEREUNDER.
   19. NOTHING IN THIS ARTICLE OR IN ANY  FIRST  HOME  SAVINGS  AGREEMENT
 ENTERED  INTO PURSUANT TO THIS ARTICLE SHALL BE CONSTRUED AS A GUARANTEE
 BY THE STATE THAT THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY WILL QUAL-
 IFY FOR THE PURCHASE OF A HOME.
   20. TO ESTABLISH THAT AN ACCOUNT OWNER OR DESIGNATED BENEFICIARY IS  A
 FIRST  TIME HOME BUYER, THE INDIVIDUAL SHALL COMPLETE A FORM PROMULGATED
 BY THE COMPTROLLER CERTIFYING, UNDER THE PENALTIES OF PERJURY, THAT SUCH
 INDIVIDUAL IS A FIRST TIME HOME BUYER.
   21. AN INDIVIDUAL MUST NOT INTEND TO USE ANY PORTION OF THE REAL PROP-
 ERTY PURCHASED USING THE FIRST HOME SAVINGS ACCOUNT FUNDS IN A TRADE  OR
 BUSINESS,  OR AS A VACATION HOME OR AS AN INVESTMENT, EXCEPT AS AN OWNER
 OCCUPIED MULTIPLE DWELLING WITH NO MORE THAN TWO RENTAL UNITS.
   22. MONIES WITHDRAWN FROM FIRST HOME SAVINGS ACCOUNTS AND ANY INTEREST
 WHICH HAS ACCRUED SHALL NOT BE  CONSIDERED  AS  TAXABLE  INCOME  TO  THE
 ACCOUNT  OWNER  FOR  STATE PERSONAL INCOME TAXATION PURPOSES, SO LONG AS
 THE MONIES ARE APPLIED FOR THE PURCHASE OR CONSTRUCTION OF  A  QUALIFIED
 FIRST  HOME  PURCHASE  BY THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF
 THE ACCOUNT.
   § 1256. PROGRAM LIMITATIONS; FIRST HOME SAVINGS ACCOUNT. 1. NOTHING IN
 THIS ARTICLE SHALL BE CONSTRUED TO:
   (A) GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST  WITH
 RESPECT  TO  AN ACCOUNT UNLESS THE DESIGNATED BENEFICIARY IS THE ACCOUNT
 OWNER;
   (B) GUARANTEE THAT THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY WILL BE
 FINANCIALLY QUALIFIED TO PURCHASE A HOME;
   (C) CREATE STATE RESIDENCY FOR AN INDIVIDUAL MERELY BECAUSE THE  INDI-
 VIDUAL IS A DESIGNATED BENEFICIARY; OR
   (D)  GUARANTEE  THAT  AMOUNTS  SAVED  PURSUANT  TO THE PROGRAM WILL BE
 SUFFICIENT TO COVER THE DOWN PAYMENT OR CLOSING COSTS  PURSUANT  TO  THE
 PURCHASE OF A QUALIFIED FIRST HOME.

 S. 4058--B                          9
 
   2.  (A) NOTHING IN THIS ARTICLE 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 THE ACCOUNT OWNER
 OR DESIGNATED BENEFICIARY WITH RESPECT TO:
   (I) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
   (II) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT.
   (B)  THE  COMPTROLLER  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 GUARANTEED BY THE STATE.
   § 2. Subsection (b) of section 612 of the tax law is amended by adding
 a new paragraph 42 to read as follows:
   (42) (A) EXCESS DISTRIBUTIONS RECEIVED DURING THE TAXABLE  YEAR  BY  A
 DISTRIBUTEE  OF  A  FIRST HOME SAVINGS ACCOUNT ESTABLISHED UNDER THE NEW
 YORK STATE FIRST HOME SAVINGS PROGRAM PROVIDED FOR UNDER  ARTICLE  TWEN-
 TY-EIGHT  OF  THE PRIVATE HOUSING FINANCE LAW, TO THE EXTENT SUCH EXCESS
 DISTRIBUTIONS ARE DEEMED ATTRIBUTABLE TO  THE  DEDUCTIBLE  CONTRIBUTIONS
 UNDER PARAGRAPH FORTY-TWO OF SUBSECTION (C) OF THIS SECTION.
   (B)  (I) THE TERM "EXCESS DISTRIBUTIONS" MEANS DISTRIBUTIONS WHICH ARE
 NOT:
   (I) QUALIFIED WITHDRAWALS WITHIN THE MEANING  OF  SUBDIVISION  TEN  OF
 SECTION TWELVE HUNDRED FIFTY-TWO OF THE PRIVATE HOUSING FINANCE LAW;
   (II)  WITHDRAWALS  MADE  AS A RESULT OF THE DEATH OR DISABILITY OF THE
 DESIGNATED BENEFICIARY WITHIN  THE  MEANING  OF  SUBDIVISION  ELEVEN  OF
 SECTION TWELVE HUNDRED FIFTY-TWO OF SUCH LAW; OR
   (III)  TRANSFERS  DESCRIBED  IN  PARAGRAPH  (B)  OF SUBDIVISION SIX OF
 SECTION TWELVE HUNDRED FIFTY-FIVE OF SUCH LAW.
   (II) EXCESS DISTRIBUTIONS SHALL BE DEEMED ATTRIBUTABLE  TO  DEDUCTIBLE
 CONTRIBUTIONS  TO THE EXTENT THE AMOUNT OF ANY SUCH EXCESS DISTRIBUTION,
 WHEN ADDED TO  ALL  PREVIOUS  EXCESS  DISTRIBUTIONS  FROM  THE  ACCOUNT,
 EXCEEDS THE AGGREGATE OF ALL NONDEDUCTIBLE CONTRIBUTIONS TO THE ACCOUNT.
   § 3. Subsection (c) of section 612 of the tax law is amended by adding
 two new paragraphs 42 and 43 to read as follows:
   (42) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
 A  FIRST HOME SAVINGS ACCOUNT ESTABLISHED UNDER THE NEW YORK STATE FIRST
 HOME SAVINGS PROGRAM PROVIDED FOR  UNDER  ARTICLE  TWENTY-EIGHT  OF  THE
 PRIVATE  HOUSING  FINANCE  LAW, TO THE EXTENT NOT DEDUCTIBLE OR ELIGIBLE
 FOR CREDIT FOR FEDERAL  INCOME  TAX  PURPOSES,  PROVIDED,  HOWEVER,  THE
 EXCLUSION  PROVIDED FOR IN THIS PARAGRAPH SHALL NOT EXCEED FIVE THOUSAND
 DOLLARS FOR AN INDIVIDUAL OR HEAD OF HOUSEHOLD, AND FOR MARRIED  COUPLES
 WHO  FILE  JOINT  TAX  RETURNS,  SHALL  NOT EXCEED TEN THOUSAND DOLLARS;
 PROVIDED, FURTHER THAT SUCH EXCLUSION SHALL BE  AVAILABLE  ONLY  TO  THE
 ACCOUNT OWNER AND NOT TO ANY OTHER PERSON.
   (43) DISTRIBUTIONS FROM A FIRST HOME SAVINGS ACCOUNT ESTABLISHED UNDER
 THE NEW YORK STATE FIRST HOME SAVINGS PROGRAM PROVIDED FOR UNDER ARTICLE
 TWENTY-EIGHT  OF THE PRIVATE HOUSING FINANCE LAW, TO THE EXTENT INCLUDI-
 BLE IN GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES.
   § 4. This act shall take effect on the one hundred eightieth day after
 it shall have become a law, and shall apply to taxable years  commencing
 on  or  after  the first of January next succeeding the date on which it
 shall have become law; provided, however,  that  effective  immediately,
 the commissioner of taxation and finance and the comptroller are author-
 ized  and  directed  to promulgate any rules or regulations necessary to
 implement the provisions of this act on its effective date on or  before
 such date.